84 Major Pakistani Textile Mills Declared Defaulters by ICA

Karachi: The International Cotton Association (ICA) has declared 84 major Pakistani textile mills as defaulters. As a result, these mills are now unable to enter into cotton purchase agreements in international markets.
According to media reports, Chairman of the Cotton Ginners Forum, Ihsan ul Haq, stated that due to non-fulfillment of cotton import agreements in recent years, the ICA has declared these mills defaulters. Consequently, these mills are now barred from purchasing cotton from any country worldwide.
Ihsan ul Haq further mentioned that, as per the Pakistan Cotton Ginners Association’s data for November 30, 2024, Pakistan’s cotton production stands at approximately 5.2 million bales, marking a 33% decline compared to the same period last year.
Given these circumstances, there were expectations of a significant increase in the prices of cotton and cottonseed. However, unexpected record imports of cotton and yarn by textile mills from foreign countries have led to a continuous downward trend in cotton prices. Additionally, the imposition of an 18% sales tax on locally produced cotton has led to a lack of interest among local textile mills in purchasing domestic cotton, further contributing to the declining prices of cotton and cottonseed.
This situation has caused concern among cotton ginners and farmers, raising fears of a further reduction in cotton cultivation in the coming year.