Cotton prices continue to weaken, but deteriorating fibre quality, expensive imports and higher financing costs are limiting the benefits for Pakistan’s textile manufacturers.
Pakistan’s cotton market remained under pressure during the week ending October 31, 2026, with the Karachi Cotton Association’s quoted spot rate declining by Rs200 to Rs17,800 per maund, according to the latest weekly cotton review.
Despite satisfactory trading activity, spinning mills remained cautious amid weakening cotton yarn prices, liquidity constraints and complaints about deteriorating domestically produced fibre quality.
Cotton Quality Adds to Spinning Costs
Cotton traded between Rs16,000 and Rs18,000 per maund in Punjab and Sindh, while higher-priced Balochi cotton fetched Rs18,700–19,000. Seed cotton (phutti) was quoted at Rs7,000–9,000 per 40 kg.
International cotton futures traded between 79 and 84 US cents per pound.
Market participants reported problems with shorter staple lengths and the mixing of different cotton grades by some ginners, potentially affecting yarn quality and processing efficiency.
Higher international freight costs have also complicated procurement of imported cotton.
Financing and Compliance Pressures Increase
The State Bank of Pakistan raised its policy rate by 50 basis points to 12% on October 26, increasing financing pressure on manufacturers.
Separately, the Federal Board of Revenue has directed registered spinning units to install video surveillance systems by November 15, 2026, covering fibre opening, blending and processing operations.
The monitoring requirements extend to cotton, polyester, viscose, wool and acrylic.
Cotton Revival Plan Targets Better Seeds
The government is considering reducing the approval period for imported cotton seed varieties from approximately seven years to 12–18 months, while retaining mandatory biosafety testing.
An industry revival proposal also envisages annual investment of Rs15–20 billion in research, seed development and farmer support. This remains a proposal, not an approved allocation.
Meanwhile, India’s extension of duty-free cotton imports until December 31 could strengthen its mills’ raw-material competitiveness.
For Pakistan, the critical priorities are improving cotton quality, restoring growers’ profitability and reducing manufacturing costs. The coming weeks will test whether declining cotton prices translate into meaningful savings for spinning mills.
