LAHORE: A wave of concern swept through Pakistan’s cotton sector after the Karachi Cotton Association (KCA) failed to issue the daily cotton spot rate for the first time in 52 years, disrupting bank financing to ginners and textile mills and suspending Pakistan’s representation of daily cotton prices in international markets.

The sudden action has triggered serious concerns among cotton stakeholders in Pakistan and abroad. The KCA building has long been regarded as a symbol of Pakistan’s organised cotton trading system. Since 1935, the KCA has been issuing the daily cotton spot rate, which serves as a benchmark for domestic trade, bank financing, insurance valuation and international market representation.

The crisis emerged after the Federal Investigation Agency (FIA) and the Evacuee Trust Property Board on Friday declared the historic Karachi Cotton Association/Cotton Exchange building, established in 1933, as federal government property and took its possession.

The authorities sealed the building and ordered immediate evacuation of offices of over 320 registered cotton brokers, cotton importers and exporters, as well as major textile groups operating from the premises.

Cotton Ginners Forum Chairman Ihsanul Haq remembers that except for a brief disruption in 1973, when cotton-related institutions were nationalised, the spot rate had been issued uninterruptedly for decades. However, due to the sealing of the KCA building over the past two days, the association has been unable to release the spot rate.

Sealing of exchange building disrupts trade

As a result, banks are facing difficulties in extending loans to textile mills and ginning factories against pledged cotton, while insurance companies may also struggle to assess the value of mortgaged cotton stocks in case of fire or other losses. Moreover, Pakistan’s absence from daily cotton price reporting in global markets has raised fears of reputational and commercial damage.

Published in Dawn, December 17th, 2025