Record High Cotton Price Sparks Panic in Textile Sector

The price of cotton in Pakistan on Wednesday hit a record high, triggering a wave of anxiety in the country’s textile sector.

The cost of cotton soared to an all-time high of Rs. 15500 per 40 kilograms (kg) in the Karachi cotton market. This came after a surge in the international price of cotton.

“Cotton futures in New York opened at 113.92 cents per pound on Wednesday morning and surpassed the threshold of $1 per pound after 10 years,” the Karachi Cotton Brokers Forum Chairman, Naseem Usman, told The Express Tribune.

The price of cotton in Pakistan jumped by Rs. 700 – Rs. 1000 per 40 kg, he said. The price of high-quality cotton reached Rs. 15000 per 40 kg in the open market, while Balochi cotton was being sold for Rs. 15500 per 40 kg.

The surge in prices has led to turmoil in the cotton and textile markets, with producers like textile spinners worried that they might not be able to sell their products at an appropriate price.

“These are all-time high rates for Pakistan,” Usman said. “Textile mills have also not been able to enter into import agreements due to soaring prices of cotton in the international market.”

He added that exporters are also wary of signing contracts amid price volatility and the dollar-rupee disparity.

In 2011, the price of cotton futures in New York also rose to a record high of $2.26 per pound, Usman recalled.

“At that time, cotton was being sold for Rs. 14500 per 40 kg in Pakistan,” Usman said. “The price surge triggered a wave of bankruptcies in the textile sector as many cotton yarn producers were forced to shut down.”

Pakistan’s cotton and textile sector is already facing significant challenges, including record-high container and shipment charges, as well as pest attacks on cotton crops due to rainfall.

The Karachi Cotton Association on Wednesday announced an increase of Rs. 400 in the spot rate of cotton, which closed at Rs. 14,300 per 40 kg.