Cotton Review: Market sees sharp weekly price swings

KARACHI: Cotton market witnessed a volatile week as prices swung sharply downward, reversing last week’s gains, even as fresh rains in key growing regions raised fresh concerns for the crop and industry leaders warned of a looming import bill running into billions of dollars. Cotton prices fell by a significant 300 to 400 rupees per maund this week, as last week’s upward trend gave way to a sharp downturn. The spot rate also declined by 100 rupees per maund. Over the past two weeks, cotton prices have swung by a notable 800 to 1000 rupees overall, though trading activity is reported to have improved despite the volatility. Meanwhile, the Overseas Investors Chamber of Commerce and Industry (OICCI) has voiced deep concern over the continuing decline in domestic cotton production. The chamber warned that if the trend continues, Pakistan may be forced to import cotton worth 2 to 3 billion dollars, placing a heavy burden on the national economy. On a more positive note, the “Cotton Mela 2026” held in Khanpur emerged as a notable success story, with delegations from the Pakistan Cotton Brokers Association (PCBA) and the Pakistan Cotton Ginners Association (PCGA) holding productive discussions on the cotton trade, a development seen as encouraging for the sector. On the legal front, the Sindh High Court has granted temporary relief to the Karachi Cotton Association (KCA), permitting it to continue business operations in its building. However, the association says that despite the court order, it has still not been allowed to return to the premises, a matter over which it has expressed strong reservations. Adding to the industry’s concerns, rains have begun in the cotton growing areas of Sindh and Punjab, raising fears of a possible impact on the standing crop. Cotton prices in the local market witnessed a volatile week, with a bearish trend ultimately prevailing even as sharp swings pushed rates to fresh highs before pulling back sharply, industry sources reported. The week began on an upward note as a shortage in the supply of phutti (seed cotton) drove prices higher. Market sources attributed this partly to the actions of several ginners who had earlier sold large quantities of cotton at lower rates. In a bid to delay deliveries on those low-priced deals, these ginners shut down their factories entirely or ran them only partially, triggering panic across the market. As a result, cotton prices surged abruptly by 500 to 600 rupees per maund within a short span. The situation shifted, however, once the supply of phutti registered a marginal improvement. Ginners, gripped by the same panic that had earlier driven prices up, began offloading their cotton stocks. This selling pressure sent prices tumbling from their peak. In Sindh province, cotton had climbed to a high of 18, 500 to 18, 600 rupees per maund before retreating to 17, 800 to 18, 000 rupees per maund. Punjab province saw a similar pattern, with prices rising to 19, 200 to 19, 500 rupees per maund before easing back to 18, 600 to 18, 700 rupees per maund. The spot rate mirrored this volatility, fluctuating up and down through the week in line with the broader market movement. Market sources further disclosed that deliveries of nearly 25, 000 bales of the lower-priced cotton remain outstanding, a backlog that continues to weigh on trading sentiment as buyers and sellers await resolution. Cotton prices across Pakistan continued to see fluctuations this week, with both lint and seed cotton (phutti) rates moving unevenly as rainfall in key growing regions disrupted the pace of arrivals and a fresh production report pointed to a significant shortfall compared to last year. According to the Pakistan Cotton Ginners Association’s (PCGA) production report up to the 15th of the month, one of the key factors behind the decline in cotton prices, output stood at approximately 528, 000 bales, marking a drop of nearly 77 percent compared to production recorded during the same period last year. Meanwhile, rains have been reported across almost all cotton-growing districts of Punjab, delaying the arrival of seed cotton in the market. Sindh province also received light showers in several areas, though market observers say the region still urgently needs more substantial rainfall. Industry sources note that if adequate rains occur in the coming days, the overall crop outlook could improve. In terms of pricing, cotton lint in Sindh settled between Rs 17, 800 and Rs 18, 000 per maund after fluctuations, while seed cotton traded between Rs 8, 200 and Rs 8, 600 per 40 kilograms. In Punjab, lint prices fell from an earlier range of Rs 19, 300 to Rs 19, 500 per maund to Rs 18, 600 to Rs 18, 700 per maund. Seed cotton in the province ranged between Rs 8, 300 and Rs 8, 800, while rain-affected seed cotton fetched a lower price of around Rs 7, 000. In Balochistan, cotton prices settled between Rs 17, 900 and Rs 18, 000 per maund following fluctuations, with seed cotton trading between Rs 8, 400 and Rs 8, 800. Meanwhile, the Spot Rate Committee of the Karachi Cotton Association reduced the spot rate by Rs 100 per maund, closing it at Rs 18, 200 per maund. Karachi Cotton Brokers Forum Chairman Naseem Usman stated that international cotton prices showed an overall mixed trend. The New York cotton futures rate remained between 78 to 80 American cents per pound. According to the USDA weekly export and sales report, 51, 300 bales were sold for the year 2025-26, with China topping the list by purchasing 15, 500 bales, followed by Vietnam in second place with 12, 300 bales, and India in third place with 7, 100 bales. For the year 2026-27, 16, 100 bales were sold, with Vietnam topping the list by purchasing 7, 100 bales, followed by India in second place with 4, 700 bales, and Pakistan in third place with 2, 200 bales. Exports stood at 276, 300 bales, with Vietnam topping the list by importing 96, 300 bales, followed by Pakistan in second place by importing 42, 700 bales, and Turkey in third place by importing 31, 800 bales. Pakistan’s cotton production has collapsed to less than half its peak level, falling from 14 million bales to just 6. 85 million bales in fiscal year 2025-26, a decline that is costing the country an estimated two to three billion dollars annually in additional imports and lost export earnings, according to a new report by the Overseas Investors Chamber of Commerce and Industry (OICCI). The report, titled “Seeds of Growth, ” is based on the views and observations of OICCI member companies linked to the agricultural sector. It notes that while cotton has suffered a severe downturn, other areas of agriculture have shown mixed results: the use of hybrid seeds has tripled maize yield per acre, even as nearly 20 percent of the country’s milk output continues to go to waste because of inadequate cold chain infrastructure. The report underscores the broader importance of agriculture to Pakistan’s economy, noting that the sector contributes around 23 percent to the country’s Gross Domestic Product (GDP) and employs 37 percent of the national workforce. Meanwhile, in a development that could offer some relief to cotton growers, light to moderate rainfall has been reported in the districts of Sanghar, Mirpurkhas, Hyderabad and Nawabshah. Agricultural sources say the rain is expected to benefit the cotton crop significantly, aiding its growth and health while improving the future quality of the harvest. Meanwhile, the “Cotton Mela 2026, ” held at the Cotton Research Institute in Khanpur, emerged as a shining example of success, proving true the well-known saying that one should start from where one is, with what one has, and do what one can. Despite its limited resources, the institute has demonstrated that the genuine revival of cotton does not depend on large-scale projects but on true passion and firm resolve. More than 100 distinguished guests from across Punjab, including Lahore, Faisalabad, Multan and Wahari, attended this historic event. The program saw enthusiastic participation from the Agriculture Extension Department, the Plant Protection Department, various seed companies, researchers, students, and particularly the dedicated farmers of the Khanpur belt, all of whom lent strength to this national mission. The organizers expressed heartfelt gratitude to all participants and stakeholders whose constructive suggestions and presence lent dignity to the event, adding that this journey, which began from the soil of Khanpur, would, God willing, serve as a precursor to the revival of cotton across the entire country. In a separate development, the Chairman and Executive Committee members of the Pakistan Cotton Brokers Association met with the Chairman of the Pakistan Cotton Ginners Association. During the meeting, detailed discussions were held regarding the challenges faced by cotton brokers in the cotton trade. The Chairman of the PCGA assured the delegation of his full cooperation and commitment to resolving these issues. Karachi’s Cotton Exchange building, a red-brick structure located on I I Chundrigar Road, served as the hub of Pakistan’s cotton trade for more than a century, where cotton deals were struck daily, prices were determined, and brokers and individuals associated with the textile industry from across the country would gather. However, the building was sealed last year, after which all activities came to a halt, and cotton traders have since relocated to various parts of the city. Although the Sindh High Court granted temporary relief to the Karachi Cotton Association (KCA), allowing it to continue business activities within the building, the association says that despite the court order, it has not yet been permitted to return to the premises. Copyright Business Recorder, 2026

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