The cotton market in Pakistan is showing signs of recovery after a prolonged downward trend, primarily due to quality issues in local procurement. Karachi Cotton Association has increased spot prices by Rs. 300 per maund, marking the first uptick after a significant decline of Rs. 5,000 per maund from Rs. 21,000 to Rs. 16,000 since the start of September.
Meanwhile, cotton prices in major Punjab markets have rebounded by up to Rs. 600 per maund from their low point of Rs. 6,600.
Several factors contributed to the previous decline, including a fall in the value of the dollar, increased cotton arrivals, expectations of a bumper crop, and a government crackdown on hoarding essential commodities.
However, recent whitefly attacks have reduced bumper crop estimates, resulting in a surge in demand for quality cotton. Additionally, the continuous fall of the dollar against the rupee has played a role in this recovery.
Market analysts believe that if cotton arrivals decrease and quality improves, prices are likely to continue to rise. There are differing opinions on the government’s cotton production estimates, with some suggesting they may be overestimated to keep prices low.
Despite the challenges, support for the cotton industry is crucial to boost production and address environmental factors affecting output.
In the international context, cotton prices have remained relatively stable, with fluctuations influenced by factors like demand in China and global consumption trends.
