KARACHI: The Spot Rate Committee of the Karachi Cotton Association on Friday increased the spot rate by Rs 50 per maund and closed it at Rs 9000 per maund. The local cotton market remained stable on Friday. Cotton Analyst Naseem Usman told that supply and quality of Phutti is improving with every passing day. He also told that import agreements of 15 lac bales were signed. It is expected that 45 lac bales will be imported.
He told that either there is a buyer of high quality cotton or low quality cotton in the market. However, here is hardly any buyer of mixed quality cotton. Newly elected central chairman of All Pakistan Textile Mills Association Adil Bashir while addressing the AGM, Adil urged the new leadership of APTMA Punjab to focus on removal of upfront incidentals on the import of raw materials both cotton and polyester which is short for industry consumption.
Also, he urged the Punjab leadership to work for long term specialized energy tariffs for industry of both gas and electricity. Chief coordinator Pakistan Hosiery Manufactures Association Adil Butt during a meeting of zonal committee pointed out that entire textile sector is presently under disarray owing to high cotton yarn prices owing to its shortage in the country.
What is disturbing the value-added textile industry is non-availability of cotton yarn in the domestic market putting millions of dollars export orders at stake, he said. He asked the government to pay immediate attention to resolve the issue of cotton shortage and its quality.
Adil Butt said that availability of high-quality cotton is fundamental to the textile value chain, as cotton makes market, shape industries and causes revolution and brings prosperity to economies. He also stressed the need for adopting new technology so that Pakistan's exports may be able to cope with the emerging challenges in international arena.
Meanwhile, a delegation of Pakistan Cotton Ginners Association under the leader ship of the chairman PCGA, Dr Jassomal called on Governor Punjab Chaudhry Muhammad Sarwar and discussed with him the issues faced by cotton ginners. He discussed him with the factors behind low cotton production due to low quality of seeds and torrential rains.
Earlier, Economic Coordination Committee of the Cabinet approved removal of Additional Customs Duties (ACDs) and Regulatory Duties (RDs) on 169 selected HS Codes of textile sector, including fibers, yarns and fabrics of Nylon, Viscose, Acrylic, Rayon, Silk, Wool and vegetable-based fibers like Hemp, etc.
According to sources in Finance Division custom duty and additional custom duty on 169 tariff lines was ranging from 2 to 16 per cent and 2 to 7 per cent respectively. Naseem told that August 2020 was supposed to be the low point in Pakistan's external trade scorecard. Heavy monsoon rains across the country disrupted supply chain, with the destruction in Karachi particularly affecting the port activity.
As a result, monthly figures for both goods imports and exports have recorded double digit decline. Yet, textile group imports stand out, which recorded nearly 40 percent rise on a year-on-year basis. Why? Raw cotton imports.
As per PBS Advance Releases, Pakistan recorded its highest ever raw cotton import bill for the month of August (on a seasonal basis) this year. In fact, raw cotton import volume during the month was 12.5 times higher than same month last year and 3.5 times higher than average August imports over the last decade.
Naseem Usman told that according to the statistics released by Pakistan Cotton Ginners Association till September 15, 2020 10 lac 35 thousand bales were produced in the country which is 44.12% less as compared to the last years cotton production of 18 lac 52 thousand bales. He also told that textile imports will further increase as a result of which country's economy will further deteriorate.
According to the first estimate released by Agriculture Crop Reporting Service, the sowing of cultivated area during 2020-21 season witnessed a decline of 12% owing to major reason behind this was non availability of good quality of seeds. The reason monsoon spell had caused huge loss in Sindh especially in the districts of Sanghar, Mirpurkhas, Umer Kot, Badin, Tando Allah Yar, Tando Muhammad Khan, Hyderabad and Dadu.
The report indicated that 25% cotton crop in Sindh has been damaged quality and supply of seed cotton was affected. Picking was also affected due to rains. Similarly, the rains in cotton belt of Punjab have caused loss to cotton crop. The high moisture makes the cotton crop susceptible to Pink boll worm attacks. The pink boll worm attacks can damage around 20 to 30 percent of the crop and affect the lint quality. The farmers are advised to immediately drain out water from their fields.
He also told that this year due to torrential rains, unsuitable weather conditions, corona lockdown and especially due to the substandard seeds cotton production was badly effected. Amid coronavirus cases increasing in competitor economies including India and Bangladesh, garment orders are rapidly shifting to Pakistan.
Moreover, ICE cotton futures rose on Wednesday on the back of technical buying and gains in global shares market, with the natural fiber on track to post its fourth straight monthly gain.
Cotton contracts for December rose 0.77 cent, or 1.2%, to 66.06 cents per lb, at 12:45 pm EDT (1645 GMT). The contact has added about 1.4% for the month due to crop damage worries from Hurricane Sally and storm Beta, while it also gained for a second straight quarter, up over 7% so far.
"We are seeing a little bit of repositioning ahead of the end of the month," said Bailey Thomen, cotton risk management associate with StoneX Group.
He also told that 1200 bales of Shahdadpur were sold at RS 8350, 1400 bales of Tando Adam were sold at Rs 8175 to Rs 8500, 1200 bales of Sanghar were sold at Rs 8175 to 8450, 1600 bales of Haroonabad were sold at Rs 9200 to Rs 9250, 1000 bales of Faqeerwali, 400 bales of Donga Bonga, 1200 bales of Fort Abbas were sold at Rs 9200 to Rs 9250, 400 bales of Yazman Mandi, 200 bales of Rahim Yar Khan, 200 bales of Bahwalnagar, 200 bales of Marrot were sold at Rs 9200, 200 bales of Khairpur Thamiwali, 200 bales of Ghazi Ghat, 200 bales of Burewala were sold at Rs 9100, 1000 bales of Chichawatni were sold at Rs 8900 to Rs 9000, 600 bales of Layyah were sold at Rs 8900 and 200 bales of Sahiwal were sold at Rs 8800.
He told that rate of cotton in Sindh was in between Rs 8250 to Rs 9100. The rate of cotton in Punjab is in between Rs 8800 to Rs 9200. He also told that Phutti of Sindh was sold in between Rs 3700 to Rs 4400 per 40 kg. The rate of Phutti in Punjab is in between Rs 3800 to Rs 4800 per 40 kg.
The rate of Banola in Sindh was in between Rs 1475 to Rs 1650 while the price of Banola in Punjab was in between Rs 1750 to Rs 1850. The rate of cotton in Balochistan is in between Rs 8650 to Rs 8750 while the rate of Phutti is in between Rs 4200 to Rs 5100.
The Spot Rate Committee of the Karachi Cotton Association has increased the spot rate by Rs 50 per maund and closed it at Rs 9000 per maund. The polyester fiber was available at Rs 153 per kg.
Copyright Business Recorder, 2020
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