LAHORE: The recent steep drop in lint and raw cotton prices has caused significant financial strain for ginners and growers, leading to widespread concerns about the sector’s stability.
In the past week, lint and raw cotton prices plummeted by Rs2,000 and Rs1,000 per 40kg, respectively, intensifying the crisis for those involved in cotton production.
Ihsanul Haq, Chairman of the Cotton Ginners’ Forum, has expressed alarm over the economic impact of the price drop. He suggests that the decline in cotton prices mirrors troubling trends seen in other crops like wheat, rice, maize, and canola.
Haq attributes the price drop to a combination of factors including record increases in electricity and gas tariffs, tax hikes, the closure of several textile mills, and a bearish trend in international cotton markets. As a result, domestic lint prices have fallen significantly.
In Punjab, the price of cotton has decreased to Rs17,000 per 40kg, while in Sindh, it has dropped to Rs16,500 per 40kg. Raw cotton prices have similarly fallen to Rs7,500 in Punjab and Rs7,000 in Sindh, with the possibility of further declines.
This downturn is discouraging growers from investing in high-quality farm inputs, potentially reducing crop size for the current season. The Pakistan Cotton Ginners Association reports a 48% decrease in raw cotton arrivals at ginning factories compared to the same period last year, with approximately 442,000 bales delivered by July 15.
