KARACHI: Cotton production witness reduction by 44% during current year, and textile mills has increased the import of cotton. Bright chances of increase in exports of textile sector products.
The overall increasing trend in the prices of cotton was witnessed in the local cotton market due to increase in buying and increase in the supply of Phutti. The rate of cotton increased by Rs150 per maund due to improvement in the quality of Phutti after rain. The cotton of Punjab was sold at Rs 9000 per maund.
According to the statistics released by Pakistan Cotton Ginners Association till September 15, 2020 extraordinary reduction of eight lakh bales (44.22%) in cotton production was witnessed as compared to last year production during this year. The extraordinary decline in cotton production came as a surprise to the people associated with cotton because no one was expecting a drastic reduction in cotton production however crop was damaged during the last rains. Moreover, the quality of cotton was also affected due to rains.
However, after the news of low cotton production, textile mills are formulating follow-up import strategies. The rate of cotton in Sindh is in between Rs 8200 to Rs 8600 per maund. The rate of Phutti is in between Rs 3400 to Rs 4100 per 40 kg while the rate of Banola is in between Rs 1650 to Rs 1700 per maund. The rate of cotton in Punjab is in between Rs 8600 to Rs 9000 per maund. The rate of Phutti is in between Rs 3500 to Rs 4500 per 40 kg while the rate of Banola is in between Rs 1750 to Rs 1850 per maund. The rate of cotton in Balochistan is in between Rs 8500 to Rs 8600 per maund while the rate of Phutti is in between Rs 4400 to Rs 4800 per 40 kg.
The Spot Rate Committee of the Karachi Cotton Association has increased the spot rate by Rs 150 per maund and closed it at Rs 8700 per maund. Cotton and Phutti prices rose further on Friday and Saturday after the reports of decline in cotton production. According to the experts prices of cotton may increase further. All Pakistan Textile Mills Association will appeal to the government to abolish import tax on cotton.
Chairman Karachi Cotton Brokers Forum Naseem Usman told that relatively increasing trend was witnessed in the rate of cotton in international market. Fluctuation was seen in the Rate of Promise (Waday Ka Bhao) of New York Cotton due to different reasons. Despite rising tensions between China and the United States, China continues to buy cotton from the United States in abundant quantity. According to this month weekly export report of USDA China is on the top after importing 95,000 bales. Although there is an over all decrease of 19 % was witnessed in exports. The rate of cotton remained stable in China and Brazil however, the prices of cotton in India increased relatively.
A tough contest is expected between the two big groups of cotton ginners during the election of Pakistan Cotton Ginners Association on Monday September 21. Moreover PCGA on September 15 issues the initial statistics of the cotton production according to which 10 lakh 35 thousand bales were produced in the country which is 44.12 % less as compared to the last years cotton production of 18 lakh 52 thousand bales.
Naseem Usman told that according to the people related with the cotton business this year cotton production and quality have declined dramatically due to unfavourable weather conditions, Coronavirus lockdown and especially due to poor quality of seeds. As a result, farmers have suffered huge losses.
Moreover, women involved in picking of cotton and thousands of labourers and ginners were suffering due to closure of some ginning units. According to APTMA sources, this year's cotton production is lower than last year's and the mills will have to import more cotton to meet the demand. Although large groups of textile mills are currently importing cotton, exclusive those big groups who are enjoying tax exemptions in the form of DTRE. The country is already facing difficulties due to low cotton production and the import of cotton will not be beneficial for the economy.
Pakistani textile mills are receiving export orders for textile products from foreign countries mainly due to the spread of corona virus in Bangladesh and India. As a result of which foreign importers are taking interest in the import of Pakistani textile products. This is good for the export of Pakistani textile sector.
Copyright Business Recorder, 2020