KARACHI: The price of raw cotton in Pakistan reached a historic high after rising by over 90 percent this year, mainly due to high global and local demand and short crop, ginners and traders said.  
Pakistan, which produced the highest ever output of around 15 million bales of cotton in 2014-15, now continuously faces crop decline, forcing the country to look to the international market to meet the textile sector’s requirements. 
As the harvesting season draws to a close, the country’s ginneries received 7.3 million bales of cotton, up from last year’s 5.3 million bales, according to fortnightly data released on January 1, 2022, by the Pakistan Cotton Ginners’ Association (PCGA).  
“The short production and high demand have almost doubled the prices of cotton from last year,” Naseem Usman Osawala, senior cotton broker and analyst, told Arab News on Monday. “The high-grade cotton is being traded at around Rs 20,000 per maund (40 kilograms) while the spot rate has also hit a historic highest level of Rs 18600 per maund. Last year the rates were hovering around Rs 10,500 per maund.”
Cotton analysts said the international cotton market was also bullish amid tight supply and high demand.  
“Cotton prices in the US market and India have also increased due to supply concerns,” Osawala said. “Due to the fewer bales left with ginners, prices are expected to further escalate or remain at higher end.” 
Ginners say the harvesting season has almost come to an end and there were around 100,000 bales left.
“Around 90 percent of the ginneries have been closed due to lack of cotton supply,” PCGA chairman Sohail Mehmood Harral told Arab News. “The available stock is expected to last by next months. The new season will commence from June, till then the ginneries would remain closed.”
Traders said textile and spinning mills were cautiously buying cotton amid higher rates while ginners were reluctant to sell on the expectations of a further price hike.   
This year, less cotton was available for export as ginners sold only 16,000 bales to exporters compared to 70,000 bales last year, according to PCGA data.  On the other hand, the local textile sector purchased 7 million bales of cotton as compared to 4.6 million purchased last year. 
The textile sector is expected to import cotton this coming year to meet local requirements.  
Pakistan exported $7.75 billion worth of textile goods during the five month of the current fiscal year, in which period the export of cotton remained zero, according to the Pakistan Bureau of Statistics.  
Pakistani textile exporters said they had booked orders at prevailing prices but the prices kept increasing due to which many exporters were likely to default.    
“The input cost has increased by 30-40 percent during a year,” Muhammad Jawed Bilwani, the chairman of Pakistan Hosiery Manufacturers and Exporters Association (PHMA), told Arab News. “Many exporters will not be able to honor their export commitments. The government should support the industry for the timely completion of export orders.”  
Pakistan's cotton import increased by 78 percent to $670 million during the July-November 2021 period of the current fiscal year.