The good news for Pakistan’s textile industry is that cotton prices have seen a downfall. Earlier, the prices were so high that they peaked at an 11-year high last month in Pakistan’s history. Karachi Cotton Association’s committee reduced the spot rate by Rs300 per maund to Rs11,900 per maund.
Prices in the international market also decreased while rates in the New York cotton market fluctuated between 84 cents to 95 cents per pound and later closed at 81 cents per pound. In the local market, prices remained stable even though ginners were left with very little stock.
Naseem Usman, chairman of Karachi Cotton Brokers Association, said the current cotton season is about to end. In contrast, the new season has begun in lower Sindh with partial sowing of cotton. Punjab and Sindh governments are rendering efforts to increase the germination of seeds with better quality seeds. In Sindh, cotton prices remained Rs10,200 per maund to Rs11,500 per maund. Rates in Punjab stood between Rs10,500 to Rs11,500 per maund. Rates on credit remained at around Rs12,000 per maund.
Cotton production in Pakistan has been recorded at 5.6 million bales only, which was the lowest level in 30 years, against mill consumption of around 15 million bales. Pakistan would have to import about 8 million bales that would cost about $4 billion to the country when cottonseed, oil, and other by-products were included. This would add to the country’s import bill.
The unusual decline in prices was witnessed in the international market because of COVID and dollar fluctuation, said Usman. There were various reasons for the decline in cotton prices globally, mainly due to economic confrontation between China and the US.