KARACHI: The cotton market has displayed a general trend toward stability in recent days, though trading activity has remained relatively subdued. An analysis of the country’s textile export data reveals a mixed picture, with exports declining on a year-on-year basis even as monthly figures show signs of improvement.
The All Pakistan Cotton Power Looms Association has called on the government to immediately withdraw the sales tax recently imposed on local yarn purchases.
Meanwhile, the All Pakistan Textile Mills Association has lodged a strong protest over the omission of key cabinet committee decisions from official minutes. The association has escalated the matter by sending a formal complaint to Deputy Prime Minister Ishaq Dar regarding the Ministry of Food Security’s handling of the issue.
Industry sources paint a grim picture of the sector’s current state, revealing that persistent increases in electricity and gas tariffs are forcing major textile groups to close their production facilities. The situation is equally dire for medium and small-scale manufacturers, who are struggling to survive under extremely challenging conditions. Industrialists warn that escalating energy costs have pushed the entire industry to the brink of collapse.
Adding to these concerns, the textile sector faces another significant threat from the agricultural side. The combination of deteriorating cotton quality and reduced supply has raised serious concerns about lower overall production during the current season. This development threatens to compound the difficulties already confronting the beleaguered textile industry.
The local cotton market witnessed stable prices during the past week, with trading volumes remaining relatively limited. Textile mills continue to seek quality cotton at lower prices, while market dynamics show concerning trends for the sector.
Medium-grade cotton is being produced in larger quantities, with prices ranging between 14,500 to 14,800 rupees per maund, whereas premium quality cotton is trading between 15,000 to 15,500 rupees per maund. According to market sources, the supply of raw cotton is decreasing day by day, adding pressure to the market conditions.
The Pakistan Cotton Ginners Association released its production report on October 31, showing cotton output at 44 lakh and thirty seven thousand bales, which represents only a three percent decline compared to the same period last year. However, this marks a significant change from the beginning of the season when production was 44 percent higher, indicating a progressive decline in output. Market sources estimate that total cotton production for this year will reach approximately 55 lakh bales, which means mills will need to import larger quantities of cotton from foreign countries, resulting in increased expenditure of the nation’s precious foreign exchange reserves.
The industrial sector in the country is facing severe challenges due to alarming increases in electricity and gas energy prices. Several textile mills have either shut down completely or are operating on a partial basis. While the government continues to reassure industrialists with promises, practical implementation of relief measures remains absent, leaving the sector in distress.
In the provinces of Sindh and Punjab, cotton prices are trading at 14,500 to 15,500 rupees per maund based on quality and payment terms, while Phutti prices are ranging from 6,500 to 8,200 rupees per 40 kilograms. In Balochistan, cotton prices are trading at 15,300 to 16,000 rupees per maund, whereas Phutti prices are ranging from 7,200 to 8,500 rupees per 40 kilograms.
The Spot Rate Committee of the Karachi Cotton Association has maintained the spot rate at 15,000 rupees per maund.
Naseem Usman, Chairman of the Karachi Cotton Brokers Forum, stated that international cotton prices have shown a mixed trend overall. New York cotton futures prices are trading between 63.50 to 69.00 American cents per pound.
The United States Department of Agriculture’s weekly export and sales report could not be published due to an extended government shutdown in America.
Meanwhile, the All Pakistan Textile Mills Association has strongly protested against the Food Security Ministry for not including important decisions of the Cabinet Committee in the minutes and has written a letter to Deputy Prime Minister Ishaq Dar. The letter stated that the minutes received from the Food Security Ministry did not include several crucial decisions.
APTMA has demanded that revised minutes be issued in accordance with the unanimous recommendations of all stakeholders. The All Pakistan Textile Mills Association has written a letter regarding the Cabinet Committee for Cotton Revival headed by the Deputy Prime Minister. The letter mentioned that the Food Security Ministry’s minutes did not include the Deputy Prime Minister’s directives concerning the collection of cotton cess, despite the Deputy Prime Minister having instructed changes to the rules for collecting cotton cess.
Furthermore, Central Chairman of the All Pakistan Cotton Power Looms Association Chaudhry Khalid Mahmood Cheema, Senior Vice Chairman Sheikh Khalid Aziz Makhi, Vice Chairman Sheikh Aamir Nisar, former Chairman Chaudhry Muhammad Nawaz, and Patron-in-Chief Javed Sadiq Kahlon have stated that instead of imposing restrictions on yarn imports under the Export Facilitation Scheme, the government should protect the local yarn industry by eliminating the implementation of sales tax on the purchase of local yarn for textile exporters.
Textile exporters in Pakistan are required to pay an additional 18 percent sales tax when purchasing locally produced yarn compared to cheaper and better quality imported yarn. This tax disparity is creating serious concerns about the decline in consumption of domestic yarn, which poses a threat to the local spinning industry and risks unemployment for workers employed in this sector.
Industry representatives have stated that the government can maintain transparency in this matter by issuing a list of textile exporters so that sales of yarn without sales tax would not be possible for anyone other than registered exporters.
At present, imported yarn is not only cheaper but also of superior quality, whereas exporters must pay the 18 percent additional sales tax when purchasing yarn from the local market. This situation has led to a continuous decline in domestic yarn consumption, raising fears that the local spinning industry may shut down and workers in this sector may become unemployed.
Meanwhile, textile exports recorded a decline on an annual basis for the third consecutive month in October, although there was an increase in exports on a monthly basis and during the first four months of the current fiscal year. Textile exports in October reached one billion sixty-two million dollars, while the volume of textile exports over the past four months stood at six billion forty-two million dollars.
In October 2025, textile exports decreased by 0.61 percent on an annual basis. According to sources, during the first four months of the current fiscal year from July to October, textile exports increased by 4.39 percent.
According to industry sources, over the past several years, continuous increases in electricity and gas prices, along with interest rates and tax rates being higher compared to other countries in the region, have caused Pakistani exporters to fall completely out of the competitive race in global markets. The situation has reached such a critical point that major textile groups are being forced to close their production units, while medium and small industries are taking their last breath.
Copyright Business Recorder, 2025
