Cotton prices experienced a notable 27 percent increase in the past month, reaching a season-high of Rs19,700 per maund (40 kg), as reported by the Karachi Cotton Association (KCA).
The spot rate for cotton has risen from Rs15,500 a month ago.
As of December 23, cotton prices in Sindh ranged from Rs15,500 to Rs17,800 per maund, while in Punjab, they varied from Rs16,500 to Rs17,000 per maund, reflecting an increase of approximately Rs4,000 per maund.
Currently, prices stand at Rs18,500 to Rs21,000 per maund in Sindh and Rs19,000 to Rs21,000 per maund in Punjab, with spot rates at Rs19,700 per maund.
The surge is attributed to a reduction in the supply of quality cotton in the local market, primarily due to significant textile groups stockpiling quality cotton.
The rise in New York cotton futures prices, reaching around 86.50 to 87 cents per pound, made import deals less lucrative, contributing to the rapid increase in local cotton prices.
Textile mills’ acquisition spree, especially in the past week, has further driven up cotton prices by Rs3,000 to Rs4,000 per maund.
Naseem Usman, chairman of the Karachi Cotton Brokers Association, notes expectations for increased cotton sowing in lower Sindh regions and early farming in various Punjab regions, contributing to an optimistic outlook for cotton production.
Despite an estimated cotton production of 8.4 million bales this season, textile mills may face a shortfall, requiring imports to meet the demand of around 13 million bales.
The reopening of the Afghan border and potential reopening of the Chaman border provide hope for increased imports.
The Sindh government’s proactive efforts to modernize Karachi’s garment city aim to invigorate the textile industry.
The industrial estate, spanning over 300 acres, focuses on value-added textile production, with plans for industrial units and water treatment plants to ensure favorable environmental conditions.
Addressing concerns over declining domestic production, director general of Agriculture Sindh, Munir Ahmed Jumani, stressed the importance of cotton as the backbone of the country’s industrial sector.
Continuous challenges such as adverse weather conditions, water scarcity, and pest attacks have negatively impacted cotton yields.
