Pakistan tops US cotton buying as local prices fall

Pakistan remained the top buyer of US cotton for a second week even as domestic cotton and phutti prices fell sharply. Industry bodies have called for tax, energy and interest rate relief, warning of deeper distress in the cotton and textile sectors. LAHORE: Pakistan remained the biggest buyer of US cotton for a second straight week even as domestic cotton and phutti prices fell steeply during the Eidul Azha holidays, while industry groups renewed calls for tax cuts, lower energy tariffs and cheaper borrowing in the upcoming budgets to support the cotton and textile sectors. Cotton prices in Sindh declined by Rs2,000 per maund to Rs21,000 per maund, while in Punjab they fell by Rs1,000 per maund to Rs22,000 per maund. Phutti prices also dropped by Rs1,500 per maund to Rs10,500 per 40 kilograms. Market experts warned that prices could come under further pressure in the coming days. Chairman of the Cotton Ginners Forum Ihsanul Haq said a new tax imposed by Punjab on the transport of cotton and phutti from Sindh had widened the price difference between the two provinces, making cotton costlier in Punjab. The decline in domestic prices has come alongside weakness in global cotton markets, where prices have fallen by up to 10 cents per pound in recent days, adding to pressure on Pakistan’s market. Despite the drop in local prices, the textile sector is still relying heavily on imported cotton because of shrinking domestic availability. During the latest reporting week, Pakistan purchased 68,030 bales out of the 112,000 bales sold by the United States, making it the leading buyer. Pakistani textile mills are also importing large volumes of cotton from Brazil. Industry seeks policy relief Pakistan’s cotton and textile sectors are facing growing strain from high taxes, elevated electricity and gas charges, costly financing and the recently imposed super tax on large industries. Mr Haq said about 500 cotton ginning factories and more than 150 textile mills across the country have either closed or are working below capacity. Industry bodies, including the All Pakistan Textile Mills Association and the Pakistan Cotton Ginners Association, have asked the federal and provincial governments to reduce taxes, energy tariffs and interest rates in the upcoming budgets. They warned that without immediate relief, the industry could face widespread bankruptcies. Exporters have also urged the federal government to restore the previous final tax regime by treating tax deducted on export proceeds as the exporters’ final tax liability, arguing that the move would support exports and reduce tax complications. India move highlighted by analysts Attention was drawn to India’s decision to abolish all taxes and duties on imported cotton from June 1 to October 31. The measure includes withdrawal of the cumulative 11 per cent import duty as well as the Agriculture Infrastructure and Development Cess. Industry observers described the step as a strategic and business-friendly move aimed at supporting India’s growing textile exports to China. Since November 2025, India has been exporting at least 30,000 tonnes of cotton yarn to China each month, up from 600 tonnes per month a year earlier. The increase had raised concerns over the availability of quality cotton and the effect of import duties on the competitiveness of Indian textile manufacturers. The decision is expected to further strengthen India’s cotton and textile exports. Cotton analyst Sajid Mahmood described India’s policy as a timely example of government support for the textile sector in line with global competition. He said that with India receiving sizeable cotton yarn orders from China and other major markets, uninterrupted access to raw materials had become critical. He added that the removal of import duties would allow Indian mills to buy cotton more cheaply, complete export orders on time and compete more effectively in overseas markets. Mr Mahmood said the Indian move also offers a lesson for Pakistan, urging policymakers to improve the responsiveness of decisions affecting the textile and cotton value chain and ensure uninterrupted raw material availability so the sector can better respond to changing international market conditions. Assembly motion filed over research institute land Separately, Punjab Assembly member Chaudhry Ijaz Shafi from Rahim Yar Khan has submitted an adjournment motion in the provincial assembly, calling on the government to stop plans to establish a gymkhana club within the Central Cotton Research Institute. He said the move could weaken the historic institution’s role in cotton research and development.