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Business Recorder
23-06-2025
- Business
- Business Recorder
Weekly Cotton Review: Market shows signs of stability
KARACHI: The cotton market has shown signs of stability, with business activity also picking up. The spot rate has increased by Rs 300 per maund, marking a positive trend for traders and growers. Several ginning factories in Sindh and Punjab have partially resumed operations, while approximately 20,000 to 25,000 bales of phutti (seed cotton) have already arrived at ginning facilities. However, the textile and cotton ginning sectors are facing pressure due to recent budget measures. The continuation of sales tax on cotton, phutti, and other by-products, along with the decision to keep imported cotton tax-free, has negatively impacted the industry. Ehsan ul Haq, Chairman of the Cotton Ginners Forum, stated that these policies are having adverse effects. Abid Zaidi reported that authorities are closely monitoring the cotton crop situation in Pakistan. Agricultural experts from the CCRI Multan have issued recommendations for cotton growers, valid until June 30. Sajid Mahmood explained that the guidelines provide detailed instructions on crop maintenance and strategies to address potential challenges. During the past week, the local cotton market witnessed overall price stability with relatively better trading activity. In Sindh province, cotton prices ranged between Rs 16,300 to Rs 16,700 per maund, while in Punjab, prices stood at Rs 16,800 to Rs 17,200 per maund. Meanwhile, phutti (seed cotton) was traded at Rs 7,700 to Rs 8,500 per 40 kg in Sindh and Rs 8,000 to Rs 8,800 per 40 kg in Punjab. Currently, two to three ginning factories are operational in both Sindh and Punjab, leading to increased cotton trading. Several mills are actively purchasing new cotton, while the arrival of phutti has also been gradually rising. In the recent budget, the government eliminated the Export Facilitation Scheme (EFS) for the textile and ginning sectors on the import of cotton and fabric. However, ginners had hoped for the removal of multiple taxes imposed on them, but the budget only introduced an 18% sales tax on yarn imports. While the All Pakistan Textile Mills Association (APTMA) has appreciated some measures, ginners expressed significant disappointment as most existing taxes on them remain unchanged. The negative impact of these taxes is expected to extend to cotton growers, who have also expressed dissatisfaction with the budget decisions. The EFS facility for importing cotton and fabric is currently available, which is expected to negatively affect the local cotton industry. Since an 18% sales tax is imposed on local cotton, the market will struggle to gain momentum, directly impacting cotton farmers. If cotton prices decline, the rates for cottonseed (phutti) will also drop. Additionally, with high input costs for cotton growers, there are concerns that cotton cultivation may decrease this season. This year, major mill groups have already signed large-scale import contracts for cotton, leading to relatively lower purchases of local cotton. As a result, ginners and cotton farmers will see reduced demand for both phutti and raw cotton, and prices are expected to remain unfavourable. The situation may further discourage cotton production in the coming season. In Sindh, the price of cotton per maund ranged between Rs16,300 and Rs16,700, while phutti (seed cotton) for 40 kg was sold at Rs7,700 to Rs8,500. Meanwhile, in Punjab, cotton per maund was traded at Rs16,800 to Rs17,200, with phutti (40 kg) priced between Rs8,000 and Rs8,800. The Spot Rate Committee of the Karachi Cotton Association increased the spot rate by Rs300 per maund, closing the spot rate at Rs16,500. Naseem Usman, Chairman of the Karachi Cotton Brokers Forum, reported that international cotton prices remained weak. The future price of New York cotton closed at 64.10 to 67.00 American cents per pound. The cotton ginning and oil mills sector is facing growing concerns following the federal budget's failure to eliminate sales tax on cotton and its by-products. Industry leaders fear that more ginning factories and oil mills may shut down, leading to a surge in undocumented trade. Business communities are urging Prime Minister Shehbaz Sharif to allocate the substantial annual funds of over Rs. 700 billion from the Benazir Income Support Program towards reviving struggling industries instead of charity. They argue that boosting businesses will strengthen the national economy. Ehsan ul Haq, Chairman of the Cotton Ginners Forum, revealed that despite recommendations from a committee formed on Prime Minister Shehbaz Sharif's directive—supporting textile mill owners' demands to either abolish the Export Facilitation Scheme (EFS) or implement it domestically—the budget retained sales tax on cotton, cottonseed, oilcake, and cottonseed oil. Additionally, no sales tax was imposed on imported cotton, further destabilizing the sector. Haq warned that over 800 already inactive ginning factories and 1,000 oil mills could be joined by more closures. He highlighted that Pakistan, once the world's fourth-largest cotton producer, has now fallen to seventh place due to excessive sales taxes (over 70%) on ginning and oil industries, non-implementation of crop zoning laws, and unchecked sugarcane cultivation. A significant portion of Pakistan's foreign exchange reserves is now spent on importing cotton, yarn, and edible oil. Instead of reviving distressed industries or reducing taxes, a major chunk of national resources (over Rs. 700 billion) is being diverted toward charity or misused under its guise. Haq appealed to PM Shehbaz Sharif to redirect these funds toward industrial revival to bolster the economy. Expectations were high that ginning factories in Punjab and Sindh would resume operations after Eid-ul-Adha holidays. However, due to the unchanged tax policies, only a limited number have restarted despite increased cotton arrivals in several cities. This has led to declining prices for cotton and Phutti, directly hurting farmers and weakening the economy. Experts also warn of a potential record rise in undocumented trade as a result. Abid Zaidi said that at present, only a few ginning factories are operational in Sindh and Punjab, ( number is increasing day by day )working at a slow pace due to limited arrivals at the start of the season. The growers, ginners and the textile industry had placed high hopes on the federal budget, anticipating supportive measures from the government. However, no tax relief was granted. As a result, market sentiment turned negative, and lint prices sharply declined by Rs. 1,000 per maund from Rs. 17,500 to Rs. 16,500 in a single day. Adding to this pressure, global cotton prices are also weak, further dampening the domestic market. The combination of high input costs and falling cotton prices has deeply disappointed growers, who were already facing hardship due to low wheat prices earlier in the year. Current government policies appear to favour imports, placing further strain on local farmers. Without a level playing field, the survival of growers, ginners, and even the textile industry is in serious jeopardy under the prevailing tax regime and the cotton demand is likely to drop about one million bales this year. Cotton sowing is already lagging significantly behind targets, and if the current tariff structure continues, farmers will be further discouraged from planting cotton. As a result, Pakistan's cotton production is expected to fall short of projections. In addition, rising temperatures and a growing whitefly infestation are likely to further damage the crop. Hardly 400 ginning factories are likely to be operational this season and the rest will take rest. We may have even lower production compared to last season. In its recent meeting, the Farmers Advisory Committee at the Central Cotton Research Institute (CCRI), Multan, issued detailed agronomic recommendations for cotton growers, effective through June 30. Cotton experts highlighted increasing pest pressures in cotton-growing regions, particularly from whitefly, jassid, thrips, and other insect pests. Growers were strongly advised to conduct regular pest scouting and apply pesticides only when pest populations reach economic threshold levels, and in consultation with cotton experts. Head Transfer of Technology CCRI Multan Sajid Mahmood said for jassid control, when the population reaches one nymph or adult per leaf, farmers should apply Dinotefuron at 100 grams or Flonicamid at 60 grams per 100 litres of water per acre. These insecticides are also effective against aphids. In the case of thrips, where 8–10 nymphs or adults per leaf are observed, Spinetoram at 60 ml or a mixture of Abamectin + Thiamethoxam at 500 ml per 100 litres of water per acre is recommended—particularly if mite infestation is also present. Experts recommended delaying the initial pesticide application as long as possible. For whitefly management, the use of at least 10 yellow sticky traps per acre is advised. If the population exceeds five nymphs or adults per leaf, chemical control using Flonicamid (80 grams), a mixture of Centrinili Prol + Dinotefuran (300 ml), or Pyriproxyfen (400–500 ml) per 100 litres of water per acre should be adopted. In fields where boll formation has commenced, pink bollworm infestation has been reported. Farmers should install one pheromone trap for monitoring and eight traps per acre for active management. For termite control, a combined application of Chlorpyrifos (1000 ml) and Fipronil (480 ml) through flood irrigation using a single nozzle is advised. For fields in the flowering or boll development stage, consistent and adequate irrigation is essential. Thinning should be completed within 25 days under moist soil conditions, and all weak or diseased plants should be removed. Effective weed management through timely irrigation and mechanical control—particularly in the first 60 days—is crucial, as unchecked weed growth can result in up to 40% yield loss. The use of high-tine cultivators (riggers) is recommended once the crop is six weeks old. Additionally, in glyphosate-tolerant varieties, glyphosate may be applied at 800–1000 ml per 100 litres of water per acre to manage weeds. For cotton sown in March–April for seed purposes, rouging—removal of unwanted, off-type, or diseased plants—should be completed before boll formation. In cases where fruit shedding symptoms are observed, a foliar spray of zinc sulphate (250 grams), borax (150 grams), and magnesium sulphate (300 grams) in 100 litres of water per acre is recommended. To enhance nutrient uptake, a separate solution of 2 kg of urea should be added to the spray mix, and the application repeated after 15 days. Furthermore, once the crop reaches 45 days of age, a post-irrigation application of one bag of urea along with 5–6 kg of zinc sulphate is recommended to support optimal growth and productivity. These guidelines have been developed by CCRI's cotton experts to help cotton growers safeguard crop health and maximize yields during the critical mid-season growth phase. Copyright Business Recorder, 2025
Business Recorder
16-06-2025
- Business
- Business Recorder
Weekly Cotton Review: Prices dip further as spot rate falls by Rs500 per maund
KARACHI: The downward trend in cotton prices persists, with the spot rate declining by Rs 500 per maund. Several ginning factories in Sindh and Punjab have partially resumed operations, with approximately 8,000 to 10,000 bales of cotton lint reaching ginning factories so far. However, the government has not announced any incentives for ginning factories in the budget, instead imposing an 18% sales tax on yarn imports—a move that has left ginners deeply disappointed. Ihsan-ul-Haq, Chairman of the Cotton Ginners Forum, stated that this decision is detrimental to the industry. Similarly, the Pakistan Cotton Ginners Association (PCGA) has also rejected the budget, calling it 'poisonous' for farmers and the ginning industry. According to Dr. Jesumal, Chairman of PCGA, the government has failed to take concrete steps to address the challenges facing the cotton sector. In Sindh, cotton is currently selling between Rs 16,000 to Rs. 16,500 per maund, while in Punjab, prices range from Rs 16,500 to Rs. 17,000 per maund. Phutti prices have been recorded between Rs. 7,800 to Rs. 8,800 per 40 kg. The federal budget lacks a clear strategy to boost cotton production. Sohail Talat, Chairman of the South Punjab Pakistan Business Forum, emphasized that the government must take effective measures to increase cotton output. He stated that a cohesive agricultural policy and financial support for research are essential for the sector's growth. Head Transfer of Technology Central Cotton Research Institute Multan Sajid Mahmood echoed these concerns, asserting that agricultural development is impossible without proper policy and research investments. In the local cotton market, several ginning factories in the provinces of Sindh and Punjab have partially resumed operations after the extended holidays of Eid-ul-Adha last week, while more factories are preparing to start. The supply of cotton has also been gradually increasing. In the budget, the Textile Sector and the Ginning Sector will see the elimination of the Export Facilitation Scheme (EFS) on the import of cotton and fabric, while ginners were hopeful that several taxes imposed on ginning would be abolished in the budget. However, the budget has only imposed an 18% sales tax on the import of yarn, although APTMA has appreciated these measures. Overall, the ginners have been greatly disappointed, as several taxes imposed on them remain unchanged. This disappointment among ginners will also have a negative impact on cotton growers, who are equally disheartened. The EFS facility is available for the import of cotton and fabric, which will have negative effects on local cotton because an 18% sales tax is imposed on local cotton. As a result, the cotton market will not be able to gain momentum, and this will impact cotton growers. If the price of cotton decreases, the price of cottonseed will also drop. Additionally, if the input costs for cotton growers remain high, there is a risk of reduced cotton cultivation. This year, large groups of mills have already signed a significant number of import contracts for cotton, which will result in relatively lower purchases of local cotton. As a consequence, ginners and cotton farmers will see reduced demand for cottonseed and lint, and they will also not receive fair prices. In the provinces of Sindh and Punjab, the price of cotton currently ranges between 16,000 to 17,000 rupees per maund, while Phutti (40 kg) is being traded at 7,800 to 8,800 rupees. The Spot Rate Committee of the Karachi Cotton Association reduced the spot rate by 500 rupees per maund and closed the spot rate at 16,200 rupees per maund. Naseem Usman, Chairman of the Karachi Cotton Brokers Forum, said that international cotton prices remained bearish. New York cotton futures closed at 65.30 to 69.06 cents per pound. According to the USDA's weekly export and sales report, sales for the 2024-25 season reached 60,200 bales. Vietnam topped the list by purchasing 28,000 bales. India ranked second with purchases of 18,600 bales, while Pakistan came in third with 6,600 bales. For the 2025-26 season, 36,100 bales were sold. Vietnam again led with 25,100 bales, followed by Turkey in second place with 7,500 bales, and Bangladesh in third with 2,200 bales. Meanwhile, cotton ginning and oil mill industries across Pakistan are experiencing deep disappointment and concern following the federal budget's failure to eliminate the sales tax on cotton and its by-products and to withdraw the exemption on sales tax for imported cotton. This decision comes despite strong recommendations from two committees established by Prime Minister Shehbaz Sharif, raising fears of further factory closures, a significant decline in cotton cultivation, and a sharp drop in cotton prices. Reports indicate a staggering reduction of Rs 1,000 per maund in cotton prices after the budget. Ginners argue that a 'flawed' Export Facilitation Scheme (EFS), introduced several years ago, allowed the duty-free import of cotton, cotton yarn, and grey fabric, while an 18% sales tax was imposed on domestic purchases of these items. Ehsanul Haq, Chairman of the Cotton Ginners Forum, stated, 'This scheme led to the import of millions of cotton bales and cotton yarn, severely damaging the country's foreign exchange reserves.' 'Simultaneously, textile mills stopped purchasing cotton locally, causing a massive drop in the prices of cotton and phutti (seed cotton). As a result, Pakistan's total cotton production for 2024-25 plummeted to a historic low of only 5.5 million bales, with an additional 200,000 bales remaining unsold.' The decline in cotton cultivation has also forced Pakistan to import billions of dollars' worth of edible oil, lamented Junaid Iqbal, another ginner from Punjab. He stated that the EFS has plunged the cotton ginning sector into its worst economic crisis, resulting in the closure of over 800 ginning units and hundreds of oil mills across the country. Haq noted that the exclusion of these recommendations has led to a record drop of Rs. 1,000 per maund in cotton prices within just two days, bringing them down to Rs. 16,000–16,200 per maund, with fears of further declines. Additionally, the Pakistan Cotton Ginners Association has rejected the budget, calling it 'deadly poison' for farmers and the ginning industry. During a telephone conversation with Pakistan's renowned cotton analyst Naseem Usman, Sajid Mahmood, the head of the Transfer of Technology department at the Central Cotton Research Institute Multan, stated that the country's agricultural sector is currently going through a critical phase, where having a clear direction and strategy for sustainable development is absolutely essential. He mentioned that the continuous rise in production costs is becoming a major challenge for farmers, as they neither receive fair prices for their crops nor are provided with easy access to markets. According to Sajid Mahmood, due to the lack of consistent investment in agricultural research and modern technology, most farmers are still forced to rely on traditional farming methods, which directly affects per-acre yield. Sajid Mahmood said that cotton, which was once a strong pillar of Pakistan's economy, textile industry, and rural economy, is now facing a severe crisis. Coordinated efforts and a clear action plan are crucial for its revival. He added that the irrigation system has not kept pace with modern requirements, while the availability of quality seeds, fertilizers, and other agricultural inputs at reasonable prices remains a persistent issue for farmers. He emphasized that the Pakistan Central Cotton Committee (PCCC) is the key institution for cotton research and development in the country. However, unfortunately, billions of rupees in cotton cess dues are still pending from the textile industry. He demanded that these dues be released immediately so that cotton-related research can be strengthened and the scope of advanced research can be expanded further. Sajid Mahmood further stated that the 18% General Sales Tax (GST) on local cotton and its by-products is an unnecessary burden on farmers and the ginning industry, which should be immediately abolished or reduced. These measures would lead to a significant reduction in production costs and promote value addition at the local level. In conclusion, he said that for the development of a crucial sector like agriculture, a comprehensive, long-term, and ground-reality-based policy is indispensable. If experienced agricultural experts and those familiar with ground realities are included in the policymaking process, not only can farmers' difficulties be reduced, but the national economy can also benefit more from this vital sector. Copyright Business Recorder, 2025
Express Tribune
19-05-2025
- Business
- Express Tribune
High cotton imports set off alarm bells
Despite the onset of the new cotton ginning season in mid-May, the duty-free import of cotton and cotton yarn has continued unabated, setting off alarm bells across the domestic industry. The unchecked imports have caused widespread concern among farmers, ginners and industrialists, who fear that the entire cotton industry, including the ginning factories, is headed towards an unprecedented crisis. According to industry estimates, during cotton season 2025-26, the ginning and textile sectors may run at less than 50% of their production capacity. This slowdown is not only expected to impact employment and production but also result in a surge in imports of cotton and edible oil worth billions of dollars. Cotton Ginners Forum Chairman Ihsanul Haq told The Express Tribune that three ginning factories had started functioning in Khanewal and Burewala in Punjab while reports suggested that one or two units would be operational in Tando Adam in Sindh on May 25. Initially, new cotton deals are being settled at Rs17,000 to Rs17,500 per maund while phutti sales are taking place in the range of Rs8,300 and Rs8,500. In a policy shift, he said, the government has permitted the import of cottonseed for the first time in nearly 50 years. Even before the approval, some high-ranking officials and private seed companies imported cottonseed from China, Australia, the US and Brazil for trial cultivation in various parts of Pakistan.
Business Recorder
05-05-2025
- Business
- Business Recorder
Weekly Cotton Review: Prices surge amid improved trading volumes
KARACHI: Last week, the cotton market witnessed a significant surge in prices alongside improved trading volumes, while cotton picking has also commenced in the lower Sindh regions. According to Chairman Cotton Ginners Forum Ehsan ul Haq initial activity has been observed in the buying and selling of cotton advance deals, generating positive expectations among traders. Internationally, a slight recovery in New York cotton market prices was recorded following a downturn, which proved encouraging for the local market. However, the government-level deadlock over the Export Finance Scheme (EFS) issue still persists, with indications that measures to resolve it will be announced in the upcoming budget. The Federal Committee on Agriculture (FCA) has set a cotton production target of 10.18 million bales from 2.2 million hectares for 2025-26. Experts emphasise that the revival of the cotton industry depends on strengthening agricultural research institutions and the effective use of modern technology. However, Head Transfer of Technology Central Cotton Research Institute Multan Sajid Mahmoud stressed the need to ensure farmers receive quality seeds and resources. During the past week, the local cotton market experienced an overall upward trend in cotton prices. Needy mills were settled at prices ranging from 15,500 to 17,500 rupees per maund, depending on quality and payment conditions. The trading volume remained relatively better. New York cotton prices showed a mixed trend, though the upward factor remained dominant. APTMA, PCGA, and FPCCI continued to protest against the EFS facility, appealing and pleading with the government to ensure a level playing field, but no attention is being given. Disappointed by the government's delaying tactics, PCGA Chairman Dr Jesumal Lemnani has sent a special letter to the Army Chief and the Chief Justice of the Supreme Court of Pakistan, urging their intervention. Additionally, news is circulating about the upcoming 2025-26 cotton season. Reports suggest that cotton will be cultivated on 35 lac acres in Punjab province, while Sindh province is expected to see cultivation on 15 lac acres. The target for cotton cultivation in Punjab province for the current season has been set at 35 lac acres. This was stated by Punjab Agriculture Secretary Iftikhar Ali Sahu while chairing a high-level review meeting on the status of cotton at the Agriculture House. He emphasised that all possible resources are being mobilized to achieve the cotton cultivation target. Field formations have been tasked with achieving 100% of the target by May 15, and through timely and specialized campaigns, 28% of the total target has already been met He further mentioned that technical guidance for the care of early cotton cultivation is ongoing, and practical measures are being taken to ensure the availability of canal water in cotton-growing areas. He clarified that 50% of the total cotton cultivation target will be achieved from the Bahawalpur Division, adding that the current trends in cotton cultivation this year are highly encouraging. In the provinces of Sindh and Punjab, the price of quality cotton, based on payment conditions, currently ranges between 15,500 to 17,500 rupees per maund. The Spot Rate Committee of the Karachi Cotton Association has maintained the spot rate stable at 16,700 rupees per maund. Naseem Usman, Chairman of the Karachi Cotton Brokers Forum, stated that international cotton prices have shown a mixed trend. After fluctuations in New York cotton futures, there was an upward trend, with prices ranging between 68.41 and 69.91 American cents per pound. According to the USDA's weekly export and sales report, 108,400 bales were sold for the year 2024-25. Malaysia remained the top buyer with 25,600 bales, followed by Bangladesh with 25,400 bales, and Vietnam in third place with 15,200 bales. For the year 2025-26, a total of 32,900 bales were sold. Indonesia led with 15,800 bales, Pakistan secured the second position with 15,400 bales, and China ranked third with 900 bales. The international cotton market showed improvement due to a decline in the dollar index, recovering from its lowest level in over two weeks. The reason behind recovery is indications from China's Ministry of Commerce regarding progress in improving US-China trade relations Meanwhile, in coastal cities of Sindh, the extremely limited-scale picking of the new cotton crop has begun, leading to the initiation of advance cotton contracts. For the first time in Pakistan's history, there is a possibility that the new cotton ginning season will commence in the first week of May. Chairman Cotton Ginners Forum Ehsan ul Haq said that advance contracts for cotton from the new crop in Pakistan have commenced during the initial phase. Initially, two ginning factories in Punjab's cities of Burewala and Mandi Jahanian have finalized advance sales deals for 600 bales of cotton, priced between Rs17,000 to Rs17,300 per maund, based on delivery scheduled between May 10 and 15. Meanwhile, these factories procured cotton from coastal areas of Sindh at Rs8,300 to Rs8,500 per 40 kilograms. They stated that cotton picking has begun in very limited quantities in some coastal regions of Sindh, which is being purchased by cotton ginners from Punjab. Sajid Mahmood, Head of the Technology Transfer Department at the Central Cotton Research Institute (CCRI) Multan in a telephonic conversation with this scribe, stated that credible reports indicate Pakistan is expected to import approximately $3 billion worth of cotton this year. This not only imposes a significant financial burden on the national economy but also underscores the deep-rooted challenges facing the domestic cotton sector. The scale of these imports reflects a critical gap in local production, which currently falls short of meeting national demand—an outcome shaped by a combination of administrative, technical, and research limitations. He stressed that in such a scenario, the importance of research and development in cotton becomes even more vital. However, institutions like the Pakistan Central Cotton Committee (PCCC)—a key national body—are facing severe shortages in research funding, which hampers the pace and quality of scientific innovation. Mahmood also noted that pending cess payments from the textile industry remain unresolved, and their timely clearance could significantly support the strengthening of the research infrastructure. Highlighting the constraints within the PCCC, he shared that only 28% of sanctioned positions are currently filled by agricultural scientists and technical staff. This shortage of skilled manpower severely restricts the continuity and expansion of research activities. Additionally, challenges such as the untimely availability of agricultural inputs for field trials and limited operational budgets are affecting the overall effectiveness and outcomes of research programs. Sajid Mahmood emphasised that these challenges directly impact cotton growers, who urgently require improved seed varieties, climate-resilient technologies, and cost-reduction strategies. Declining per-acre yields and weakened market competitiveness are clear signs that more robust research, timely advisory services, and efficient technology transfer mechanisms are urgently needed. He concluded by stating that saving foreign exchange, supporting farmers, and reviving the cotton sector will require a firm commitment to strengthening research institutions. This includes ensuring sustained resource allocation and making science-based decisions aimed at enhancing cotton productivity and sustainability in Pakistan. Copyright Business Recorder, 2025
