Business leaders in Karachi have raised a major alarm over the continued shutdown of the historic Karachi Cotton Exchange building, warning that the action is severely damaging the country's vital cotton trade and broader economy.
Historic Building Sealed in Federal Raid
The crisis stems from a joint operation conducted by the Federal Investigation Agency (FIA) and the Evacuee Trust Property Board (ETPB) on II Chundrigar Road. The raid, centered on disputed ownership claims, led federal authorities to seal the premises of the Karachi Cotton Exchange. This action has effectively halted the core operations of Pakistan's formal cotton market.
Price Discovery Mechanism Collapses
In a joint statement issued on Saturday, Businessmen Group (BMG) Chairman Zubair Motiwala and Karachi Chamber of Commerce & Industry (KCCI) President Muhammad Rehan Hanif revealed the profound consequence of the closure. For the first time in 52 years, the Karachi Cotton Association (KCA) has been unable to issue its daily cotton spot rates.
These rates are not just numbers; they are the foundational benchmark for pricing across Pakistan's entire cotton market. Their absence has created immediate and widespread uncertainty.
System-Wide Uncertainty and Stalled Trade
The leaders explained that the disruption is causing a ripple effect of paralysis across the value chain. Banks, insurers, ginners, textile mills, brokers, exporters, and importers all rely on the daily spot rate to conduct business. Without this critical data point, transactions are stalling, and confidence in the market is eroding at a crucial time.
They emphasized that this is far more than a localized administrative issue. The closure strikes at the heart of a system that supports thousands of farmers, traders, ginners, and textile enterprises. The health of Pakistan's entire cotton-textile chain, a cornerstone of the national economy, is now under threat due to the interrupted price discovery mechanism.
While strongly underscoring the need to protect market integrity and the welfare of all stakeholders in the cotton sector, Motiwala and Hanif issued an urgent appeal. They called upon both federal and provincial authorities to immediately engage with all parties involved to find a resolution. The immediate restoration of business activities at the historic exchange is vital to prevent further damage to the economy.
