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Business Recorder
3 days ago
- Business
- Business Recorder
Weekly Cotton Review: Price plunge hits linked sectors
KARACHI: In recent days, a significant drop in cotton prices has been observed, impacting sectors associated with the commodity. Due to reduced supply of phutti in the market, several ginning factories are operating partially, raising concerns among industry circles. The price of cotton has decreased by PKR 300 to 400 per maund, while phutti rates have also fallen. Recently, a delegation from the All Pakistan Textile Mills Association (APTMA) met with Chief of Army Staff (COAS) Field Marshal Syed Asim Munir, briefing him on the challenges faced by the textile industry. On this occasion, industry representatives discussed key issues with the authorities. Meanwhile, the Pakistan Business Forum (PBF) has urged the Federal Board of Revenue (FBR) to immediately issue a statutory regulatory order (SRO) to impose an 18% General Sales Tax (GST) on imported cotton. They argue that this measure will protect the local cotton industry. In another significant development, questions have been raised about the cotton production data released by the Crop Reporting Center Punjab. Ahsan ul Haq, Chairman of the Ginners Forum, revealed that these figures are contrary to reality, misleading farmers and industrialists. Additionally, agricultural experts have advised farmers to take precautionary measures to protect cotton crops from monsoon rains. Head Transfer of Technology Central Cotton Research Institute Multan Sajid Mahmood emphasized that farmers must follow expert guidelines to ensure the safety of their crops. The local cotton market experienced sluggish trading activity last week due to low interest from textile mills in purchasing cotton. Prices saw a decline of PKR 300 to 400 per maund. Meanwhile, intermittent rains in several cotton-producing regions of Sindh and Punjab have disrupted the ginning process, leading to a shortage of phutti. As a result, many ginning factories have shut down, while others are operating partially. Some ginning factories still hold old stock of cotton, which is being traded at PKR 15,500 to 15,700 per maund. Factory owners have faced significant losses due to the current market conditions. A prominent ginner from Rahim Yar Khan, who owns seven ginning factories, revealed that he had been operating five units but suffered heavy losses. He stated that fewer ginning factories in Rahim Yar Khan would remain operational this year. In recent days, some ginning factories in the area sold old cotton stock at PKR 15,500 to 15,700 per maund, incurring substantial losses. Industry sources suggest that some factory owners are also to blame for not selling their stock at the right time. Despite these challenges, market observers believe that this year's cotton production is likely to remain similar to last year's output. This year, textile mills have shown significant interest in importing cotton and have already secured contracts for approximately one million bales. The textile sector is currently awaiting the official notification regarding the imposition of an 18% sales tax on cotton imports, as the federal budget for 2025-26 proposed the discontinuation of the Export Facilitation Scheme (EFS) facility. However, the formal notification for this fiscal year has not yet been issued. In Sindh, the price of cotton per maund is in between PKR 16,000 to PKR 16,300, while Phutti is being traded at PKR 6,600 to PKR 7,000 per 40 kg. In Punjab, cotton prices stand at PKR 16,200 to PKR 16,500 per maund, while the rate of Phutti is in between PKR 6,500 to PKR 7,200 per 40 kg. Meanwhile, in Balochistan, cotton is priced at PKR 16,100 to PKR 16,300 per maund, Phutti is being sold at PKR 6,600 to PKR 7,200 per 40 kg. The Spot Rate Committee of the Karachi Cotton Association has maintained the spot rate stable at PKR 16,300 per maund. Karachi Cotton Brokers Forum Chairman Naseem Usman said that international cotton prices remained stable overall. New York cotton futures were priced between 68 to 70 cents per pound. According to the USDA's weekly export and sales report, 32,700 bales were sold for the 2024-25 season. Vietnam led the buyers with 4,600 bales, followed by Honduras with 200 bales, and Nicaragua with 200 bales. For the 2025-26 season, sales reached 132,600 bales, with Vietnam again topping the list by purchasing 42,800 bales. Pakistan secured the second position with 20,400 bales, while Guatemala came in third with 19,700 bales. The All Pakistan Textile Mills Association (APTMA) extends its deepest and most heartfelt gratitude to Field Marshal Syed Asim Munir, NI (M) for graciously meeting with a business delegation led by Dr Gohar Ejaz, HI, SI (Civ). 'We salute the Field Marshall's exemplary commitment to engaging with the business community and industry, demonstrating both patience and concern for economic issues faced by the businesses and people of Pakistan.' During the highly constructive meeting, the delegation commended the government and SIFC's monumental efforts that have brought much-needed economic stability to the country and thanked the Army Chief for his unwavering support and resolve. It presented a comprehensive overview of the challenges faced by the industrial sector, with particular emphasis on the recently enacted expansions of the Federal Board of Revenue's (FBR) powers. We are immensely thankful to Field Marshall Munir for immediately directing that the new provisions, particularly those added under Sections 37A and 37B of the Sales Tax Act, 1990 pertaining to arrest and detention, be held in abeyance, and for instructing the FBR to enter meaningful, solution-oriented dialogue with stakeholders and address their concerns. The GHQ will oversee progress through the Special Investment Facilitation Council (SIFC), fostering an environment of collaboration and trust. The delegation called for interest rates to be brought down in line with inflation to stimulate businesses and economic activity. It also highlighted the significant delay in notification of the Export Facilitation Scheme (EFS) amendments relating to exclusion of cotton, cotton yarn, and fabric from the scheme and imposition of an 18% sales tax on their imports. Field Marshal Munir assured the delegation that these measures, as announced in the Finance Minister's budget speech, will be implemented without delay. APTMA is grateful for the Field Marshall's attention to unsustainable electricity prices that are burdening manufacturers and businesses across the country. We appreciate his ongoing commitment to securing more competitive electricity rates for consumers nationwide, with special emphasis on revitalizing the industrial and export sectors. His unwavering support is a testament to his overarching vision to propel Pakistan's economic landscape to new heights. On behalf of the entire textile sector and business community, APTMA once again extends its profound gratitude to Field Marshal Syed Asim Munir NI (M) for his visionary leadership and steadfast dedication to Pakistan's progress and growth. The Pakistan Business Forum (PBF) has called on the Federal Board of Revenue (FBR) to immediately issue a Statutory Regulatory Order (SRO) for imposing 18% general sales tax (GST) on imported cotton, as outlined in the Finance Bill 2025. In a statement, the PBF emphasised that despite clear announcement in the federal budget to tax the imported cotton, its implementation was pending due to the absence of the required SRO. 'More than three weeks have passed since approval of the budget, yet the delay continues without any justifiable reason.' According to the PBF, credible reports indicate that certain influential interest groups are obstructing the issuance of the SRO. 'The government must ensure transparency and move forward in the interest of local cotton growers and the economy,' said PBF Chief Organiser Ahmad Jawad. The forum cautioned that cotton imports had exceeded domestic production for the first time in Pakistan's history – a development that poses serious risks to sustainability of textile and agriculture sectors. 'The FBR must act urgently, keeping in view the seriousness of the issue and release the SRO without further delay,' it said. The forum disclosed that importers had already entered into agreements for 7.5 million bales of cotton from international markets. 'After much effort, local cotton farmers finally achieved a level playing field through legislation. The time has come to translate that into action,' Jawad said. To reclaim Pakistan's status as a leading cotton-producing nation, he underlined the need for federal and provincial governments to launch a nationwide cotton revival programme. He recommended that the import of raw material, especially those impacting domestic industries, should be entirely excluded from the Export Facilitation Scheme. The forum also expressed concern over the current state of cotton crops. According to the latest figures, Sindh's performance remains particularly troubling, with reported supply of only 152,650 bales so far this year, compared to 327,666 bales in the same period of last year – a decline of 53%. In contrast, Punjab has shown relatively better results, with supply of 145,101 bales, reflecting a 27% rise over last year. Notable growth has been observed in several districts, including Khanewal (28,825 bales), Vehari (33,950 bales), Dera Ghazi Khan (19,397 bales) and Rajanpur (9,200 bales) – all recording improved yields. The Cotton Crop Reporting Center (CCRC) Punjab has been accused of releasing exaggerated cotton production data, contrary to actual facts. Investigations reveal that CCRC determines Punjab's total cotton yield by extrapolating the weight of cotton from a single boll to an assumed number of bolls per acre across the province. In some districts, production estimates are based on small experimental plots measuring just eight feet in length and six feet in width. For years, Pakistan Cotton Ginners Association (PCGA) has alleged that CCRC Punjab's production figures are consistently higher than actual market data, causing significant challenges for cotton stakeholders in planning their strategies. Some industry players have even suggested that the inflated numbers may be linked to undocumented sales by certain ginners. The discrepancy in data has also led to confusion in international forums, where Pakistan faces skepticism over its official cotton production claims due to conflicting reports. Ahsan-ul-Haq, Chairman of the Cotton Ginners Forum, highlighted that as of July 15, PCGA reported Punjab's cotton production at 145,000 bales, while CCRC Punjab claimed 335,000 bales—a staggering difference. He criticized CCRC's methodology, stating that estimating province-wide production based on a few bolls or small test plots is unrealistic and misleading. Haq urged CCRC Punjab to adopt a more transparent approach, similar to PCGA's practice of collecting bi-weekly sales and stock data from ginning factories. He recommended that CCRC staff gather real-time data from ginning units and grain markets to provide accurate production figures, ensuring better decision-making for stakeholders and restoring credibility in Pakistan's cotton. Sajid Mahmood, Head of the Technology Transfer Department at the Central Cotton Research Institute (CCRI) Multan, has urged cotton farmers to follow the recommendations of CCRI's agricultural experts regarding the impact of monsoon rains on the cotton crop. He stated that while timely and moderate monsoon rains can be beneficial for the crop, continuous and heavy rainfall can cause severe damage. Last year as well, heavy rains and other challenges significantly affected cotton production, resulting in only 6 million bales. Therefore, proactive precautionary measures are essential to prevent potential losses this season. He explained that excessive rainfall can lead to unwanted plant overgrowth, rapid weed development, and increased risk of pest attacks—especially pink bollworm. Immediate steps must be taken to ensure proper drainage in the fields, and rainwater should be removed within 24 hours. Digging a pit about four feet deep in one corner of the field can help collect water and ease drainage. Regarding weed control, Sajid Mahmood advised hoeing (godi) as soon as the field conditions allow. If the crop has reached a height of three feet or more, the use of tractors should be avoided to prevent damage. Instead, lighter agricultural tools like kusola should be used. For managing weeds, he recommended spraying glyphosate (1 liter per 100 liters of water) only in triple-gene cotton varieties. In conventional varieties, the use of 'Shield' is mandatory. He emphasized the importance of eliminating weeds before they begin to seed. Furthermore, Sajid Mahmood advised farmers to avoid unnecessary irrigation in anticipation of rainfall. If irrigation is required, it should be done lightly in the evening. In case symptoms of parawilt or wilting appear on the crop, apply 500 grams of potassium nitrate or potassium sulfate as a foliar spray, or apply 10 to 15 kilograms of potassium sulfate through irrigation. Copyright Business Recorder, 2025
Business Recorder
14-07-2025
- Business
- Business Recorder
Weekly Cotton Review: Trade volumes improve in largely stable market
KARACHI: The cotton market has shown overall stability in prices, with an improvement in trade volume recorded. However, recent rains in Punjab have disrupted cotton trade. Meanwhile, the market awaits the government's notification regarding the Export Facilitation Scheme (EFS). Experts report that Pakistan's cotton production has sharply declined due to unfavorable weather conditions and government policies, dropping from a record 15 million bales to just 5.5 million bales. Chairman Pakistan Cotton Ginners Forum Forum Ahsan ul Haq expressed concern over the situation, stating that this decline is severely impacting the country's foreign exchange reserves. Amid these developments, the Pakistan Central Cotton Committee Cotton Committee (PCCC) and the All Pakistan Textile Mills Association (APTMA) have reached an agreement on the issue of cotton crop residues. Additionally, the Punjab government has set an ambitious target for cotton production this season, aiming to produce 6 million bales. The local cotton market remained relatively stable over the past week, with prices showing slight variations across regions. In Sindh, cotton prices ranged between Rs. 16,000 to Rs. 16,400 per maund, while cottonseed (phutti) prices rose to Rs. 6,800–7,200 per 40 kg. In Punjab, cotton prices increased to Rs. 16,700–17,200 per maund, with phutti priced at Rs. 6,800–7,600 per 40 kg. Recent rainfall has provided some benefit to the crop, but further downpours could cause damage if water logging occurs. Currently, cotton trade in Punjab has been disrupted due to ongoing rains. Farmers are facing distress as declining phutti prices squeeze their margins, with many expressing concerns over high input costs and reduced profitability. Despite these challenges, trading volume improved during the week. The government has withdrawn the Export Facilitation Scheme (EFS) facility for cotton yarn and fabric imports while imposing a 10–18% sales tax on these items. This move aims to create a level playing field for local cotton producers. However, the official notification is still awaited. In a strongly worded statement, Muhammad Khalid Khokhar, Chairman Kissan Ittehad expressed grave concerns over the dire conditions faced by cotton and wheat growers. He warned, 'Wheat and cotton will no longer be cultivated in Pakistan,' highlighting the severe challenges plaguing the agricultural sector. Khokhar lamented that the new pricing policies have left farmers' households in mourning, with many struggling to survive. Meanwhile, an agreement has been signed between PCCC and APTMA regarding outstanding cotton payments. In a significant development, APTMA and PCCC have joined hands to revive the cotton industry, aiming to stabilize the sector and support distressed farmers. The collaboration seeks to address long-standing issues and ensure sustainable growth in cotton production. The rate of cotton in Sindh is in between Rs 16,000 to Rs 16,400 per maund, while phutti was traded at Rs 6,200 to Rs 7,200 per 40 kg. In Punjab, cotton prices stood at Rs 16,700 to Rs 17,200 per maund, with phutti priced between Rs 6,800 and Rs 7,600 per 40 kg. Meanwhile, rate of cotton in Balochistan is in between Rs 16,100 to Rs 16,300 per maund, while phutti was sold for Rs 7,000 to Rs 7,200 per 40 kg. The Spot Rate Committee of the Karachi Cotton Association maintained the spot rate at Rs 16,300 per maund. Karachi Cotton Brokers Forum Chairman Naseem Usman told that there is a decline in international cotton prices. In New York, the futures price of cotton is currently trading between 66 to 68 cents per pound. According to the USDA's weekly export and sales report, 75,100 bales were sold for the 2024-25 season. Vietnam led the purchases with 33,600 bales, followed by Pakistan with 13,000 bales, and India with 9,700 bales. For the 2025-26 season, 81,500 bales were sold. Bangladesh emerged as the top buyer with 23,100 bales, while Vietnam secured the second position with 19,900 bales. South Korea ranked third with purchases of 16,300 bales. The All Pakistan Textile Mills Association (APTMA), Ministry of National Food Security and Research (MNFSR), and Pakistan Central Cotton Committee (PCCC) have officially joined hands in a landmark agreement to resolve the long-standing cotton cess collection issue and lay the foundation for the revival of Pakistan's vital cotton sector. The signing ceremony was held at the MNFSR headquarters in Islamabad and witnessed by Federal Minister for National Food Security and Research Rana Tanveer Hussain, Secretary MNFSR Waseem Ajmal Chaudhary, Chairman APTMA Kamran Arshad, Chairman APTMA North Asad Shafi, Secretary General APTMA Shahid Sattar, APTMA Cotton Advisor Dr Javed Hassan, Cotton Commissioner & CEO PCCC Dr Khadim Hussain, and Secretary PCCC Dr Peer Adrees. Federal Minister Rana Tanveer Hussain lauded APTMA's constructive role in resolving this critical issue, emphasizing that cotton remains the lifeblood of Pakistan's textile industry and recognizing APTMA as its foremost stakeholder. The Minister expressed his full support for APTMA's vision, committing to place APTMA in the driving seat to lead the reform and revival of the Pakistan Central Cotton Committee. He also welcomed further engagement and collaboration, including a forthcoming visit to APTMA House Lahore. Chairman APTMA, Kamran Arshad, thanked the Minister for his proactive and collaborative approach, particularly in facilitating key policy measures such as easing cotton seed imports and addressing other issues in the cotton seed sector. Highlighting the severe cotton shortages in recent years that have adversely impacted the entire textile value chain, and the livelihoods of millions of cotton growers, he stressed that Pakistan has been compelled to import billions of dollars' worth of cotton from global suppliers including the US, Brazil, and Australia. Arshad reaffirmed APTMA's dedication to overcoming these challenges and hailed the agreement as a historic milestone that fulfills APTMA's promise to resolve the cess deadlock. Secretary PCCC Dr Peer Adrees noted the positive impact of APTMA's support, which has enabled PCCC to pay full salaries and pensions to its staff in recent months. Chairman APTMA North, Asad Shafi, echoed the critical importance of cotton to Pakistan's textile sector and emphasized APTMA's ongoing efforts to enhance value addition through promoting use of local cotton and inputs, development of domestic brands and internationally competitive products. Looking ahead, Kamran Arshad urged swift implementation of the PCCC restructuring to transform it into a modern, productive research institution that will spearhead innovation and productivity gains in cotton cultivation. He also called for an all-stakeholders conference, including farmers, ginners, and industry representatives, to collaboratively chart a sustainable path for Pakistan's cotton revival. APTMA remains steadfast in its commitment to support the resurgence of Pakistan's cotton crop, enabling the country to reclaim its position as a top global cotton producer. This revival is critical not only for safeguarding millions of jobs across the textile value chain but also for boosting textile exports and expanding domestic value addition— key drivers for Pakistan's economic growth and competitiveness in international markets. Despite a significant decline in Pakistan's cotton production, some stakeholders are once again recommending the cultivation of hybrid cotton, even though previous trials conducted twice ended in complete failure. Reports indicate that around 150 acres of hybrid cotton have already been planted in Punjab and Sindh shortly after the federal government allowed the import of cotton seeds. Surprisingly, the Pakistan Central Cotton Committee (PCCC), which must legally be consulted before any such cultivation, remains entirely unaware of these trials. Ehsan-ul-Haq, Chairman of the Cotton Ginners Forum, highlighted that Pakistan's cotton production has plummeted from a record 15 million bales to just 5.5 million bales due to extreme weather conditions, unfavorable government policies, and the unchecked expansion of sugarcane cultivation in cotton zones. He noted that instead of enforcing crop zoning laws, reducing agricultural input costs, and cutting the record 86% sales tax on the cotton ginning industry, authorities are focusing on importing hybrid cotton seeds under pressure from certain stakeholders. Haq recalled that in 2010, two global seed giants, Monsanto and Syngenta, conducted hybrid cotton trials in Pakistan in consultation with the PCCC, which failed completely, yielding 60% less per acre compared to traditional Pakistani varieties. Despite this, efforts are now being made to reintroduce hybrid cotton cultivation without proper evaluation or consultation with the PCCC, raising serious concerns about its potential impact on the already struggling cotton sector. The heads of Pakistan's two major agricultural institutions informed the Cotton Ginners Forum that despite multiple trials of hybrid cotton cultivation in various cities of Punjab and Sindh after 2010, all attempts failed completely. The primary reason was the incompatibility of these seeds with the local climatic conditions. They further revealed that over the past four to five years, experiments have been conducted in Pakistan with single-gene, double-gene, and triple-gene cotton seeds. Surprisingly, while double-gene varieties were expected to yield double the production of single-gene cotton and triple-gene varieties even more, the actual output of both remained lower than that of single-gene cotton. This has raised concerns that hybrid cotton cultivation in Pakistan does not appear to be succeeding, as most cotton-growing zones in the country are experiencing significantly higher temperatures compared to 2010. The officials added that they repeatedly contacted the company promoting hybrid cotton cultivation, asking them to share their trial data. However, they have yet to be granted access to this information. Copyright Business Recorder, 2025
