50% ginning factories in Punjab are now non-operational.
For the first time in history, 50 percent of ginning factories in Punjab have become non-operational due to unsold cotton stocks, leading to a continued decline in cotton prices.
The situation has raised serious concerns about the cotton industry’s future, with fears of further quality deterioration due to predicted rainfall in Punjab and Sindh.
Chairman of the Cotton Ginners Forum, Ehsan-ul-Haq, revealed that the declining quality of cotton has significantly reduced its demand, resulting in an accumulation of unsold stocks in ginning factories. This has pushed cotton ginners into a financial crisis, forcing them to shut down operations.
He further explained that the recent appreciation of the Pakistani rupee against the US dollar has also contributed to the drop in cotton prices.
Over the past week, cotton prices in Pakistan fell by Rs. 200 per maund, bringing the price down to Rs. 16,300 per maund.
The forecast of additional rainfall in Punjab and Sindh has heightened fears of further damage to the cotton crop and the quality of harvested cotton. This could exacerbate the challenges faced by the industry, which is already struggling with unsold stocks and declining prices.
Ehsan-ul-Haq also mentioned that the Pakistan Cotton Ginners Association (PCGA) is set to release the country’s overall cotton production data as of August 15.
However, discrepancies in production figures have caused concern among stakeholders.
According to the PCGA, Punjab’s ginning factories received 301,000 bales of cotton by July 31.
In contrast, the Crop Reporting Center Punjab reported that 609,000 bales were produced in the province during the same period, more than double the PCGA’s figures.
This significant discrepancy has created confusion among cotton stakeholders, making it difficult for them to devise effective strategies.
