KARACHI: The Spot Rate Committee of the Karachi Cotton Association has decreased the spot rate by Rs 100 per maund on Saturday and closed it at Rs 10,000 per maund. The local market remained bearish on Saturday. Market sources told that mills were involved in cautious buying due to which the trading volume remained low.
Cotton Analyst Naseem Usman told that according to the estimates released by the Cotton Crop Assessment Committee meeting held in Islamabad, the cotton production during the current season will be at 8.597 million bales against the fixed target of 10.89 million bales. However, according to the estimates of private sector the cotton production will below 7 million bales of 157 Kg weight.
Punjab assessed production at 5.30 million bales, Sindh gave target of 3.0 million bales, KPK 0.0065 million bales and Balochistan gave target of 0.291 million bales. The major reason behind this was non availability of good quality of seeds, absence of new seed technology, heat wave, climate change and pest attack.
Mean while, textile value-added sector has urged the government to allow duty-free cotton yarn to reduce cost of production and increase the country's exports. Naseem Usman told that it is expected that this year cotton production will be 35% less as compared to last year. He said that after the decrease in cotton production we have to import cotton of worth millions of dollar like we are importing edible oil of worth millions of dollars.
The government has almost finalised the Textile Policy 2020-25 with textile products' export target of $20.8 billion and eight objectives starting from encouraging value addition, ensuring profitability of cotton growers to strengthen Pakistan's expertise in manmade fiber, putting small medium enterprises (SMEs) on priority for infrastructure, compliance, energy efficiency, quality assurance and productivity projects. All Pakistan Textile Mills Association claims that cotton crop failure is costing Pakistan over 8 billion dollar in lower GDP per million bales of cotton and 2 billion dollar for this year in additional imports.
In its tweet Advisor to Prime Minister on Commerce Abdul Razak Dawood said "Apparel is the engine of growth in the textile sector and availability of yarn at competitive prices is the pillar of strength. All sectors have to play their respective roles to maximise overall exports,"
In another tweet Razzak said "MOC held a meeting of stake holders of spinners and apparel manufacturers to discuss availability of yarns and their prices. In light of rising prices MOC is considering reducing duties on various yarns and preparing a summary for the ECC".
Moreover, the ICE Dec cotton contract gave up 237 points for the week ending Oct 30, finishing at 68.92 as the Dec - Mar switch weakened to (86). Dec still managed a 313-point gain for Oct. Last weekend, our proprietary model (timely results provided in our complete weekly report) predicted a finish that would be near unchanged to lower Vs the previous Friday's settlement, which proved to be correct.
ICE cotton was lower on the week despite improved US export data, on strengthening US currency, COVID concerns, the lack of a US economic stimulus bill, weakness in equity markets, and on scheduled index fund rolling. Risk-off attitudes ahead of next week's national election probably incited some market participants to book profits and move to the sidelines. Without hurricane Zeta and overall poor harvest conditions Dec might have moved significantly lower.
Naseem told that 400 bales of Sanghar were sold at Rs 8500 per maund, 2200 bales of Khairpur were sold at Rs 9200 to Rs 9400 per maund, 400 bales of Fort Abbas, 600 bales of Haroonabad, 400 bales of Donga Bonga were sold at RS 10,200 per maund, 200 bales of Mianwali were sold at Rs 10,000 per maund and 400 bales of Shadan Lund were sold at Rs 9850 per maund.
He told that rate of cotton in Sindh was in between Rs 8600 to Rs 10,000. The rate of cotton in Punjab is in between Rs 9800 to Rs 10,200. He also told that Phutti of Sindh was sold in between Rs 4500 to Rs 5100 per 40 Kg. The rate of Phutti in Punjab is in between Rs 4600 to Rs 5200 per 40 Kg.
The rate of Banola in Sindh was in between Rs 1650 to Rs 1900 while the price of Banola in Punjab was in between Rs 1750 to Rs 2000. The rate of cotton in Balochistan is in between Rs 9600 to Rs 9800 while the rate of Phutti is in between Rs 5000 to Rs 5400.
The Spot Rate Committee of the Karachi Cotton Association has decreased the spot rate by Rs 100 per maund and closed it at Rs 10,000 per maund. The Polyster Fiber was available at Rs 158 per Kg.
Copyright Business Recorder, 2020
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