LAHORE: The recent “unusual” drop in lint and raw cotton prices has resulted in the ‘insolvency’ of ginners and growers.

The rates of lint and raw cotton have registered a drop of Rs2,000 and Rs1,000 per 40kg, respectively, in the outgoing week, chilling the spine of the ginners and farmers.

Cotton Ginners’ Forum chairman Ihsanul Haq says that the economic crisis has worsened as the fall in the prices of cotton hints that the lint is also following the trajectory of wheat, rice, maize and canola crops.

He says that due to a record increase in electricity and gas tariffs, tax hikes, closure of several textile mills and a bearish trend on the international cotton markets, lint rates in the domestic market have also come down.

Mr Haq says that cotton rates in Punjab have fallen to Rs17,000 and in Sindh, Rs16,500 per 40kg, while the prices may go down further. Likewise, raw cotton prices have dropped to Rs7,500 and Rs7,000 per 40 kg, respectively, in Punjab and Sindh.

This situation is causing the growers to stop further investing in the crop through the use of the best farm inputs in the areas where it is in the growing stage, he says, fearing the trend will additionally hurt the crop size this season.

The Pakistan Cotton Ginners Association data reveals that up until July 15, around 442,000 bales of raw cotton were brought to the ginning factories across the country. This is about 48 per cent less than the produce that reached the ginning units during the same period last year.

Published in Dawn, July 28th, 2024