Cotton prices in Pakistan’s domestic market hit a 10-year high of Rs. 11,000 per 40 kgs over the past week.
A national daily reported the cause to be most likely the decreasing production and rising demand. The import orders for 4.2 million bales have also been finalized, the news report said.
A decline in the production led millers to keep buying from the local market, while ginners preferred selling due to increased prices. Put together, dealers said, these factors caused cotton rates to shoot up by Rs. 400 to Rs. 500 per 40 kgs (also known as one maund). Prices of cotton yarn and polyester also followed suit.
This increase in prices led to high-quality cotton rates to clock in at Rs. 11,000 per maund. This is the highest level in the last decade, and experts familiar with the industry believe that they may rise even further by 20 percent to 50 percent in the coming days.
With the booming textile industry and higher export orders, the demand for cotton has also gone up multi-folds, which has also increased the demand for imports.
The newspaper report stated that to fulfill the demand of the local industry, around 7 million bales need to be imported. So far, however, import orders for only 4.2 million bales have been finalized.
The increased local prices have also led the industry players to demand the removal of five percent customs duty on yarn imports. They have also appealed to the government to take measures on an emergency basis to increase cotton production in the country.