At Pakistan's cotton market, buyers have started building their inventories to keep their mills running till the end of this month. A bullish sentiment has been building up in the local market even though the general condition of cotton on the international market is lackluster and local yarn prices are sluggish.

In Karachi, there was increased demand for cotton because both mills and exporters were buyers. It is foreseen that domestic cotton prices will remain firm till the end of this month. Thereafter, demand and supply phenomenon is likely to guide the market. Due to reported increase in the number of ginning factories, ginners are competing for the purchase of seed cotton.

An apparent shortage of seed cotton is resulting in the rise of domestic prices. However, a better visualisation of the current crop size will be available by the end of this month. The Karachi Cotton Association feels the most efficient way to compensate growers facing adverse conditions is by providing direct subsidy on the basis of acreage sown, as is practiced in other countries. This would not only ensure direct benefit to growers without any middlemen or malpractice but will also help to minimise losses to the government.