Karachi, June 22, 2023 – Cotton prices in Pakistan have undergone a significant decline, attributed to high taxation and the removal of energy subsidies, industry sources revealed on Thursday.
Over the past three days, cotton prices have plummeted by up to Rs. 1,000 per maund (approximately 40 kg), according to the Chairman of the Cotton Ginners Forum.
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In Punjab, cotton prices have reached Rs. 19,500 per maund, while in Sindh, they have dropped further to Rs. 18,500 per maund, as reported by Ehsanul Haq.
The situation is expected to worsen due to the absence of subsidized electricity and gas rates, exerting additional pressure on the market, as stated by Ehsanul Haq.
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In Punjab, the substantial 300% increase in gas rates has resulted in reduced interest in purchasing cotton, leading to a decline in demand from mills. In contrast, Sindh has also witnessed a lack of interest from mills due to the unfavorable conditions, according to Ehsanul Haq.
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Moreover, the implementation of a 72% sales tax on the cotton industry has further hampered cotton purchasing by cotton ginners, exacerbating the already challenging situation, highlighted the Chairman of the Cotton Ginners Forum.
In response to the unresolved issues, the All Pakistan Textile Mills Association (APTMA) has issued an ultimatum to the government. If the problems persist, mills have threatened to shut down operations starting from July 1, as warned by Ehsanul Haq, Chairman of the Cotton Ginners Forum.
