KARACHI: Cotton prices in Pakistan recorded a significant surge of Rs1,000 to Rs1,500 per maund amid escalating tensions in the Middle East, which continued to exert pressure on global commodity markets. Trading activity, however, remained subdued during the period due to the Eid-ul-Fitr holidays, which limited market participation across the board. On the international front, New York cotton futures witnessed a notable rally before undergoing a minor correction, reflecting the volatile sentiment prevailing in global markets. Meanwhile, the Pakistani government has initiated a series of measures aimed at the revival of the domestic cotton sector, which has been grappling with structural and production-related challenges in recent years. In a significant administrative development, the Karachi Cotton Exchange building has remained sealed for the past 40 days following action taken by the Evacuee Trust Property Board (ETPB) and the Federal Investigation Agency (FIA). As a direct consequence of this closure, the daily cotton spot rate — a critical benchmark for the industry — has not been issued, causing considerable uncertainty and disruption for traders and stakeholders dependent on this key market indicator. On the policy front, the All Pakistan Textile Mills Association (APTMA) has issued a stern warning regarding the deep-rooted inefficiencies within Pakistan’s power sector. According to APTMA, these systemic failures continue to keep industrial electricity tariffs at uncompetitive levels, undermining the cost viability of the textile industry and hindering its ability to compete effectively in international markets. Cotton prices in the local market witnessed a sharp rise of Rs1,000 to Rs1,500 per maund during the past week, driven by an uptick in New York cotton futures and a reduced availability of cotton domestically. Depending on quality and payment conditions, the price of cotton has now climbed to between Rs17,000 and Rs18,000 per maund. The ongoing tensions in the Middle East have disrupted maritime trade routes, leading to significant delays in the shipment of imported cotton. Compounding the situation, shipping and insurance companies have raised their freight charges and policy premiums, which has further pushed up the cost of imported cotton in the local market. Although demand for yarn has grown and its prices have also moved upward, the disproportionately steep rise in raw cotton prices, combined with higher energy costs, has substantially increased the cost of doing business for textile spinning mills. As a result, reports are emerging that several more mills are on the verge of closure or have already shut down operations. Partial sowing of the early cotton crop has begun in certain agricultural areas of Sindh and Punjab. However, recent torrential rains in parts of lower Sindh, particularly in areas such as Thatta and Gharo, have reportedly caused damage to standing cotton plants, raising concerns about the early crop yield in those regions. Cotton is currently trading at Rs16,500 to Rs18,000 per maund across Sindh and Punjab, with prices varying according to quality and payment terms. Prices of cottonseed cake and cottonseed oil are also showing a relative upward trend in the market. Naseem Usman, Chairman of the Karachi Cotton Brokers Forum, has stated that there is an element of increase in international cotton prices, with New York cotton futures currently trading between 69 and 72 US cents per pound. According to the USDA weekly export and sales report, a total of 196,700 bales were sold for the marketing year 2025-26. Vietnam led all buyers by purchasing 75,700 bales, followed by Turkey in second place with 27,800 bales, while India ranked third with purchases of 12,700 bales. For the 2026-27 marketing year, total sales reached 122,200 bales. China topped the list of buyers with 48,600 bales, Pakistan came in second place with 20,000 bales, and Vietnam ranked third with purchases of 20,100 bales. On the export side, total shipments amounted to 273,900 bales. Vietnam remained the leading importer by receiving 93,700 bales, Pakistan followed in second place with 36,400 bales, and Turkey ranked third with imports of 23,200 bales. The Agriculture Republic, a think tank working to reflect on issues faced by the agricultural economy and propose remedies, appreciated the Punjab’s cotton cultivation campaign as a positive step and called that it must be complemented by the decisive federal action. “It is imperative that the government urgently complete the PCCC-PARC merger, restore institutional clarity, and strengthen research and development systems. Simultaneously, policy reforms should prioritize local cotton through tax rationalization and targeted incentives to encourage increased production,” said Co-founder of the platform Aamer Hayat Bhandara while talking to Business Recorder. Cotton has always held a central place in Pakistan’s agricultural economy and is widely referred to as the “White Gold” of the country. It is not only a major cash crop but also the backbone of the textile industry, contributing billions of dollars to national exports and foreign exchange earnings. In the current global environment, cotton must be viewed not merely as an agricultural commodity but as a strategic asset directly linked to economic stability, industrial continuity, and national resilience. However, over the past seven to eight years, the cotton sector has faced multiple challenges, including institutional delays, lack of policy continuity, and instability in research and development systems. As a result, cotton production has declined significantly, from approximately 14–15 million bales to only 5–6 million bales, forcing the country to import raw cotton and causing a substantial outflow of foreign exchange, Aamer added. A major institutional issue remains the pending merger of the Pakistan Central Cotton Committee (PCCC) with the Pakistan Agricultural Research Council (PARC), approved by the Federal Cabinet under the government’s rightsising policy. Despite the passage of one and a half years, the process remains incomplete. Notably, the PCCC had already implemented rightsizing before the merger, reducing its workforce to 27 percent, well beyond the government’s 50 percent reduction target. Despite this, delays in completing the merger reflect inefficiency in decision-making. At the policy level, a significant imbalance persists: imported cotton enjoys relative tax relief, while locally produced cotton faces higher taxes and costs. This disparity discourages domestic production and weakens the entire cotton value chain, affecting farmers, ginners, and the broader economy. Aamer Bhandara further said global supply chain disruptions and evolving geopolitical dynamics have increased the risk of volatility in cotton availability and pricing. Copyright Business Recorder, 2026