KARACHI: The local cotton market remained bullish on Saturday after the release of the report which claims that cotton production will reduce. Market sources said that the rate of cotton reached at Rs 9200 per maund which is highest in the history.
Cotton Analyst Naseem Usman 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.
Naseem told that the Economic Coordination Committee of the Cabinet Wednesday 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.
The summary was moved by Ministry of Commerce, after approval of the National Tariff Policy Board in its meeting held on August 24, 2020.
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 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 12.0 % 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.
ICE cotton futures rose on Friday, on track to post a second straight weekly gain, as wetter weather in major crop-producing areas in the United States delayed the ongoing harvest.
Cotton contracts for December were up 0.38 cent, or 0.6%, to 65.84 cents per lb at 12:42 p.m. EDT (1642 GMT). The contract has risen more than 0.2% this week.
"There is a little bit of a wet weather that is bothering the harvest. It is not really harming the quality but prolonging the harvest," aid Rogers Varner, president of Varner Brokerage in Cleveland.
He also told that 1600 bales of Shahdadpur were sold at Rs 8200 to Rs 8400, 1800 bales of Tando Adam were sold at Rs 8200 to Rs 8500, 1400 bales of Sanghar were sold at Rs 8150 to Rs 8300, 600 bales of Hyderabad were sold at Rs 8175 to Rs 8225, 1600 bales of Khairpur were sold at Rs 8800 to Rs 8950, 1200 bales of Saleh Pat were sold at Rs 8800 to Rs 8950, 378 bales of Jam Sahib were sold at Rs 8350, 400 bales of Sarkand were sold at Rs 8500, 400 bales of Bandhi were sold at Rs 8450, 1000 bales of Rohri were sold at Rs 8750 to Rs 8800, 1000 bales of Haroonabad were sold at Rs 9100 to Rs 9150, 200 bales of Khanpur, 200 bales of Faqeerwali, 200 bales of Taunsa Shareef, 200 bales of Bahawal Nagar, 200 bales of Fort Abbas were sold at Rs 9150, 200 bales of Khanewal, 200 bales of Shujabad were sold at Rs 9000, 200 bales of Hasilpur were sold at RS 8950, 400 bales of Burewala , 400 bales of Chichawatni, 400 bales of Mian Channu were sold at RS 8900, 400 bales of Layyah were sold at Rs 8785 to Rs 8850, 200 bales of Mongi Bangla were sold at Rs 8700.
He told that rate of cotton in Sindh was in between Rs 8300 to Rs 8900. The rate of cotton in Punjab is in between Rs 8700 to Rs 9200. He also told that Phutti of Sindh was sold in between Rs 3700 to Rs 4200 per 40 kg. The rate of Phutti in Punjab is in between Rs 3800 to Rs 4500 per 40 kg.
The rate of Banola in Sindh was in between Rs 1400 to Rs 1650 while the price of Banola in Punjab was in between Rs 1700 to Rs 1850. The rate of cotton in Balochistan is in between Rs 8700 to Rs 8800 while the rate of Phutti is in between Rs 4300 to Rs 5000.
The Spot Rate remained unchanged at RS 8850 per maund. The polyester fiber was available at Rs 153 per kg.
Copyright Business Recorder, 2020
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