Rehan Hanif says sealing of historic Cotton Exchange Building has paralysed 209 businesses and undermined investor confidence
KARACHI: The Karachi Chamber of Commerce and Industry (KCCI) has voiced serious concern over the continued sealing and alleged forceful occupation of the historic Cotton Exchange Building, warning that the disruption has paralysed 209 businesses, weakened Pakistan’s cotton trade and damaged investor confidence.
In a statement issued on Friday, KCCI President Muhammad Rehan Hanif said the Chamber had received a large number of complaints from member firms affected by the closure of the Cotton Exchange Building, which houses the Karachi Cotton Association (KCA).
According to Hanif, the sudden sealing of the premises has rendered 209 commercial offices non-operational. The affected businesses include cotton brokers, importers, exporters, commission agents, textile-related enterprises and other firms linked to Pakistan’s cotton value chain, many of which have operated from the building since the country’s independence in 1947.
“The abrupt sealing has brought commercial activities to a standstill, resulting in substantial financial losses, contractual disputes, reputational damage and growing uncertainty over the future of these businesses,” he said.
Hanif described the Cotton Exchange Building as a cornerstone of Pakistan’s organised cotton market, noting that it has historically provided a transparent and internationally recognised platform connecting growers, ginners, textile manufacturers, exporters, brokers and other stakeholders across the cotton industry.
He warned that Pakistan now risks becoming one of the few cotton-producing nations without a functioning cotton exchange, sending a negative message to international buyers, foreign investors and global trading partners about the stability of the country’s agricultural and export sectors.
Highlighting the institution’s historical significance, Hanif said the Karachi Cotton Exchange had served as Pakistan’s principal centre for organised cotton trading and transparent price discovery since 1934, predating the country’s independence.
Although hedge trading was discontinued in 1976, the Exchange continued to publish daily cotton spot rates, which remained the benchmark for the domestic cotton market. These rates were widely relied upon by growers, ginners, textile mills, exporters, financial institutions and policymakers. Around 320 registered cotton brokers remained associated with the Exchange until its operations ceased nearly a year ago.
Hanif said the suspension of these functions has reduced price transparency, weakened market confidence and created unnecessary uncertainty at a time when Pakistan is striving to revive agricultural exports and strengthen its textile industry.
Referring to the ownership of the property, he stated that historical records indicate the land was originally leased in 1883, while the Karachi Cotton Association acquired the property through a registered conveyance deed in 1936. The lease was subsequently renewed until 2081, reinforcing the need for the dispute to be resolved through lawful and transparent legal procedures.
The KCCI president also expressed concern over the reported non-compliance with a Sindh High Court order dated June 18, 2026, which permitted the Karachi Cotton Association to continue its business operations from the Cotton Exchange Building until the matter is finally decided by the court.
He urged the relevant authorities to fully implement the court’s directives and uphold the rule of law.
Hanif further noted that the internationally recognised KCA HVI Laboratory, which provides cotton fibre testing and quality assessment services, has also been affected by the closure. He warned that prolonged disruption of the laboratory’s operations could undermine quality assurance standards and adversely affect Pakistan’s textile exports in international markets.
Calling for immediate government intervention, Hanif urged the Federal Government and all concerned authorities to restore possession of the Cotton Exchange Building to the Karachi Cotton Association and its lawful occupants without delay.
He stressed that the dispute should be resolved strictly in accordance with the Constitution and applicable laws while safeguarding the legitimate rights of businesses and protecting Pakistan’s commercial reputation and investment climate.
