Nearly 17 days after Karachi Cotton Exchange (KCE) was forced to shut its doors, the silence from government is as troubling as the closure itself. Under a government that repeatedly speaks of promoting business, economic growth and an ambitious $60 billion export target, the closure of a core market institution sends exactly the wrong signal.
The takeover of the KCE premises by the Evacuee Property Trust Board (EPTB) has halted trading at an exchange that functioned uninterrupted for 52 years. Around 320 registered cotton brokers have been left stranded, with losses reportedly running into billions of rupees. More critically, the ripple effects are now being felt across the textile value chain. With no cotton spot rates issued since December 12, spinning mills and other textile units are struggling to access working capital from banks, which rely on these benchmarks for financing decisions.This is not a marginal issue. Cotton and cotton-based textiles account for roughly 60 per cent of Pakistan’s export earnings. When such a central artery is blocked, the entire economic body suffers. The timing could not be worse.
The textile and clothing sector recorded a 2.57 per cent decline in November, marking the fourth consecutive month of negative growth. Reports of factory closures and job losses are becoming more frequent. Against this backdrop, the disruption of cotton trading risks compounding existing problems and pushing more firms to the brink.The government must act now. An immediate resolution whether through restoring access to the KCE premises, arranging an alternative operational setup or fast-tracking a negotiated settlement with the EPTB is essential. Delays will only deepen losses and erode trust across the textile ecosystem.Beyond resolving this immediate crisis, the government must also reflect on broader lesson. The textile sector has immense potential, but it requires a stablepredictable and business-friendly environment to thrive.
