Cotton prices plunge by Rs1,500-2,000 per maund

July 03, 2023 (MLN): The cotton prices in the domestic market have experienced a sharp decline, plunging by Rs1,500 to Rs2,000 per maund.

The price in Sindh stood at Rs16,300, while the price in Punjab stood at Rs16,800.

Ahsanullah Haq, the Chairman of the Cotton Ginners Forum attributed this drop to the removal of subsidies, driven by International Monetary Fund (IMF) conditions, which has played a pivotal role in the fall in demand for cotton.

The withdrawal of subsidies has resulted in a decrease in the profitability of cotton cultivation and adversely affected the purchasing power of farmers.

Furthermore, the textile industry has been grappling with multiple challenges, including higher interest rates and a rise in gas and electricity prices.

These factors have collectively contributed to a decline in demand for cotton, leading to the subsequent drop in prices.

Adding to the complexities of the situation, there are predictions of a potential decline in the value of the dollar as the long-standing staff-level agreement worth Rs3 billion was finally signed on June 30 between IMF and Pakistan.

The depreciation of the dollar is expected to have an additional impact on the cotton market, further contributing to the fall in prices.

In this challenging environment, Ahsanullah Haq voiced his concerns regarding the predicament faced by cotton farmers and the industry at large.

Haq highlighted the urgent need for government intervention and the implementation of supportive measures to stabilize the cotton market, such as reintroducing subsidies, lowering interest rates, and addressing the rising costs of gas and electricity.

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