LAHORE: Domestic cotton prices are expected to firm up in the coming days as textile mills accelerate purchases, buoyed by rising cotton yarn and fabric prices in China during the last two weeks of December and stronger local demand.

Cotton Ginners Forum Chairman Ihsanul Haq says market sentiment has improved despite cotton production being about 45 per cent below the official target. He noted that production is still likely to exceed earlier estimates by 100,000 to 150,000 bales, while aggressive buying by textile mills has provided price support.

According to data released by the Pakistan Cotton Ginners Association (PCGA) on Saturday, total cotton arrivals at ginning factories stood at 5.434 million bales as of Dec 31, 2025, almost unchanged from 5.452m bales recorded during the same period last year.

During Dec 16-31 alone, textile mills purchased around 218,000 bales, higher than expectations. Mr Haq said purchases could have been at least 50,000 bales more had the transporters’ strike not disrupted supplies.

By end-December, textile mills had consumed 4.708m bales, compared to 4.65m bales last year, while exporters and market players purchased about 176,000 bales. Current cotton stocks stand at 549,664 bales, slightly lower than last year’s level, indicating tighter availability. At present, 223 textile factories are operational across the country.

Regionally, Punjab ginning factories received 2.541m bales, down 4.44pc year-on-year, while Sindh recorded 2.893m bales, up 3.58pc. Despite lower reported cultivation area, Sindh’s production remained higher by 352,000 bales up to Dec 31, 2025. Notably, cotton arrivals during Dec 16-31 surged 56pc compared to the same period last year.

He also cautioned that any government approval for new sugar mills could cut cotton cultivation by up to 50pc, forcing Pakistan to import billions of dollars’ worth of cotton and edible oil annually. He urged continuation of the ban on new sugar mills and capacity expansion in designated cotton zones.

Spot rate suspension

Mr Haq expressed serious concern over the suspension of official spot cotton rates by the Karachi Cotton Association (KCA) for the past three weeks following FIA’s sealing of the KCA building on Dec 12. He warned that the absence of spot rates — the first time since 1973 — has disrupted bank financing for mills and ginners and damaged Pakistan’s credibility in global cotton markets. Several exporters’ associations have appealed to Prime Minister Shehbaz Sharif for urgent resolution.

Industry data highlight deeper structural challenges. Pakistan’s textile industry requires around 16m bales annually, but domestic availability has stagnated at 11-12m bales, necessitating imports of nearly 5m bales each year.

Sajid Mahmood, head of Transfer of Technology, Central Cotton Research Institute, Mult­an, stresses that enhancing dom­­estic production through research and development, accurate ginning-stage monitoring, and institutional reforms is critical.

Analysts agree that sustained investment in cotton, the backbone of the textile value chain, is essential for stabilising prices, reducing import dependence, and strengthening Pakistan’s export competitiveness, he concludes.

Published in Dawn, January 4th, 2026