Pakistan traders say dispute over cotton exchange building hurting economy

Pakistan’s leading traders have called for the resolution of a dispute over a historic Karachi Cotton Exchange (KCE) building, saying it is damaging the commodity’s trade.

Chairman Businessmen Group (BMG) Zubair Motiwala and President Karachi Chamber of Commerce & Industry (KCCI) Muhammad Rehan Hanif have expressed grave concern over the closure of the building located on I.I. Chundrigar Road, dubbed as Karachi’s Wall Street.

Earlier this month, federal authorities sealed the building, claiming it was illegally occupied and that it belongs to the federal government.

Karachi’s mayor disputed the federal authorities’ claim, saying the building was a property of the city government.

In a joint statement, Motiwala and Hanif said that the continued closure of the building by federal authorities has disrupted the core functioning of the formal cotton market.

For the first time in 52 years, the Karachi Cotton Association has been unable to issue its daily cotton spot rates, the “foundational benchmark for pricing in Pakistan’s cotton market”, they said, adding that the absence of the daily spot rate has already generated significant uncertainty among banks, insurers, ginners, textile mills, brokers, exporters, and importers, stalling transactions and undermining confidence in the cotton value chain at a critical period.

The interruption in cotton’s price discovery mechanism is not merely a localized operational issue, but it has systemic implications for Pakistan’s entire cotton economy, which supports thousands of farmers, traders, ginners, textile enterprises, and associated sectors, they added.

The absence of a daily spot rate undermines credit flows, stock valuations, and international trade representation, with cascading effects on growth, employment, and foreign-exchange earnings.

While urging protection of the integrity of the cotton market and the welfare of Pakistan’s critical cotton-textile sector, they called on the relevant federal and provincial authorities to urgently engage with the KCA and all stakeholders to restore the building’s operations.