Cotton Prices Report Massive Rise Amid Devaluation

Cotton and phutti prices are witnessing extraordinary increases across Pakistan, increasing by a record Rs. 700 per maund in just the last two days. It has brought a sign of relief for farmers as a further increase in prices is expected. The primary driver behind the rise is the devaluation of the rupee against the dollar. As the rupee fell to a record low against the dollar, cotton prices jumped to Rs. 19,500 per 40 kg while the phutti prices are also averaging above Rs. 8,000 across Punjab. Traders have realized that imports would get more expensive or nearly impossible as the rupee continues to fall. Cotton picking has also slowed down in the big cotton-producing regions of Bahawalnagar, Rahim Yar Khan, and Bahawalpur which has also contributed towards the price increase. Cotton ginners talking to ProPakistani said that expect cotton to cross the magic number of Rs. 20,000 in the coming days, especially with the downward trend of the rupee. Chairman Cotton Ginners Forum Ihsan ul Haq said that due to the record increase in the value of the dollar and the unexpected decrease in the arrival of phutti, a strong upward trend is being seen in the prices of cotton. He said that due to the excellent weather conditions this year and the reduction in environmental pollution due to less cultivation of sugarcane in the cotton zones, the quality of cotton is in line with international standards, along with abundant purchases by local textile mills. A foreign firm is also purchasing large quantities of cotton from Pakistan this year, due to which a record trend is being seen in the prices of cotton. In most of the cities, the prices of phutti have increased to Rs. 8,500 per 40 kg while in Kharan (Balochistan), the price of phutti reached Rs. 10,000 per 40 kg yesterday. On the other hand, Pakistan’s textile exports declined by 15 percent to $1.31 billion during the first month of FY24 compared to $1.54 billion in the same period during the previous year while exports also slid by 10.9 percent from $1.47 billion on a monthly basis compared to June 2023. Analysts are expecting a bumper crop production of cotton this year, which means less reliance on imports, but whether it will translate into a rise in export numbers, only time will tell.