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KARACHI: The Spot Rate Committee of the Karachi Cotton Association on Saturday has decreased the spot rate by Rs 100 per maund and closed it on Rs 9800 per maund.

The local cotton market remained bearish on Saturday. Market sources told that due to increase in the rate of cotton the buyers were not taking interest.

Cotton Analyst Naseem Usman told that supply of Phutti is 19% less than previous year. The rate of cotton is increasing due to the non availability of quality Phutti in the market.

Naseem also said that due to the high prices ginners in Lower Sindh were closing the mills adding that instead of making cotton ginners were involved in trading of Phutti.

Naseem said that Australia’s US$750 million cotton trade with China targeted, with mills ‘discouraged’ from purchases. Cotton Australia and the Australian Cotton Shippers Association confirm reports of a verbal directive for Chinese spinning mills to stop using Australian cotton. It emerged at the weekend that China had also verbally told steel mills and power stations to stop buying Australian coking and thermal coal Two-way trade between China and Australia was worth around A$240 billion (US$170 billion) between July 2019 to June 2020, according to the Australian Bureau of Statistics. Photo: Bloomberg

One of Australia’s most China-dependent exports, cotton, has become the latest product to be targeted, Australian industry groups said on Friday, joining a growing list that already includes coal, barley, wine and beef.

Cotton Australia and the Australian Cotton Shippers Association confirmed reports that China’s National Development Reform Commission (NDRC) has been “discouraging” Chinese spinning mills from using Australian cotton.

There has been no official confirmation from the Chinese management agency that sits under the State Council, and both industry groups are investigating. The value of Australia‘s exports of cotton to China in 2019 was roughly US$750 million.

He also told that the Federal Board of Revenue will not charge additional custom s duty (ADC) and regulatory duty on the import of various items of textile sector. The regulatory duty would not be applicable on the import of woven fabrics of artificial filament yarn, woven fabrics of artificial staple fiber, and few other items.

All Pakistan Textile Mills Association and Pakistan Ready Made Garments Manufacturers and Exporters Association Wednesday rejected the frequent increase in the prices of gas and electricity, as the move, they say, continues to make Pakistan’s products uncompetitive in the international market.

Naseem said that this year Afghanistan has a record crop of cotton and the quality is also said to be very good. Cotton is being exported to Pakistan which is estimated to be around 200,000 bales. Yesterday Afghani cotton trade deals ranging from Rs 10,150 to Rs 10,200 were recorded.

He also said that government should allow the import of quality cotton seeds as they had allowed the import of cotton from abroad.

Naseem further said that as per synthetic and Rayon Exports Promotion Council (SRTEPC), Pakistan’s textile profits fell by 62 per cent Y-o-Y in FY20 due to a dismal Q4 FY’20 performance. Its textile exports dropped by 6 per cent Y-o-Y to $12.5 billion due to lower quantity exported. In the first eight months of FY20, Pakistan’s textile exports increased by 8 per cent Y-o-Y. They dropped by 29 per cent Y-o-Y in last four months due to either postponement or cancellation of orders amidst COVID-19.

Textile revenues declined 21 per cent Y-o-Y due to the closure of retail shops during the lockdown period. As a result, overall revenues declined by 3 per cent Y-o-Y in FY20. Gross margins too declined by 2.2 per cent Y-o-Y. This was largely due to weak economies of scale due to the pandemic, higher cotton prices as local production declined further, and higher energy costs.

Cotton prices jumped by 5per cent Y-o-Y to Rs8,984/mound during 2QFY20, the main cotton procurement period, over the news of cotton shortage.

Naseem told that 400 bales of Tando Adam were sold at Rs 9350, 400 bales of Khairpur were sold at Rs 9550 to Rs 9800, 3200 bales of Fort Abbas were sold at Rs 9900 to Rs 10,000, 2600 bales of Yazman Mandi were sold at Rs 9900 to Rs 10,000, 400 bales of Marrot were sold at Rs 10,000, 200 bales of Khairpur Thamiwali were sold at Rs 10,000, 800 bales of Faqeerwali were sold at Rs 9950 to Rs 10,000, 2800 bales of Haroonabad were sold at Rs 9750 to Rs 10,000, 200 bales of Lodhran were sold at Rs 9900, 600 bales of Mian Channu were sold at Rs 9600 to Rs 9900, 400 bales of Burewala were sold at Rs 9750, 400 bales of Ahmedpur East were sold at Rs 9700 and 1000 bales of Mianwali were sold at Rs 9600.

He told that rate of cotton in Sindh was in between Rs 8800 to Rs 9800. The rate of cotton in Punjab is in between Rs 8800 to Rs 9800. He also told that Phutti of Sindh was sold in between Rs 4600 to Rs 5100 per 40 kg. The rate of Phutti in Punjab is in between Rs 4700 to Rs 5200 per 40 kg.

The rate of Banola in Sindh was in between Rs 1650 to Rs 2000 while the price of Banola in Punjab was in between Rs 1900 to Rs 2000. The rate of cotton in Balochistan is in between Rs 9000 to Rs 9200 while the rate of Phutti is in between Rs 4500 to Rs 5500.

The Spot Rate Committee of the Karachi Cotton Association has decreased the spot rate by Rs 100 per maund and closed it on Rs 9800 per maund. The polyester fiber was available at Rs 153 per kg.

Copyright Business Recorder, 2020