Pakistan's cotton output may be plunged considerably in the new season. Since farmers are not getting the right price it has compelled many of them to plant wheat instead. In November, cotton prices plunged to a three-year low on weak demand. Prices fell despite the government’s purchase of at least one million bales at higher prices from farmers in an effort to support them.

One reason for the thin trading at Karachi’s cotton market is the offshoot of a tug of war over prices between ginners and mills. Rising imports from India of cheaper fine count yarn have triggered confrontation between the value added and spinning sectors. The latter is demanding 15 per cent regulatory duty on Indian yarn to protect 30 spinning factories, mostly located in Punjab, from going out of business. But the value added textile sector opposes any new curbs and wants the cheaper yarn imports to continue.

The spinning industry is finding it hard to survive. Indian yarn is not the only threat. The Chinese have drastically cut yarn imports from Pakistan. The sudden withdrawal of China from the market has caused a slump in cotton prices the world over and Pakistan is no exception.