KARACHI: The local cotton market remained stable on Tuesday. Market sources told that trading activity was low.
Cotton prices rose on Monday, aided by a rally in equity markets, as President Donald Trump's signing of a long-awaited pandemic aid bill bolstered bets on an economic recovery and its likely fillip to demand for the natural fibre.
The cotton contract for March was up 0.17 cent, or 0.2%, at 76.37 cents per lb by 11:42 a.m. EST (1642 GMT). It traded within a range of 76.15 and 76.67 cents a lb.
"We are seeing positive trend coming from broader stock markets today, especially after the Covid relief bill was signed over the weekend," said Bailey Thomen, cotton risk management associate with StoneX Group.
"We are seeing mild activity in cotton today. The demand is pretty steady and the long-term trend to upside is still in place."
Cotton Analyst Naseem Usman told that the parliamentary body expressed concern over decline in cotton production in the country, and directed relevant authorities to take immediate steps for increasing the production of cotton in the country.
A senior official of the Federal Seed Certification told the court that the main reason of decline in cotton production in the country in the previous years was climate change.
Due to climate change some areas have been selected for cotton production in Balochistan, he said.
The secretary MNF&R informed the meeting as per available estimates cotton production in the country will be ranging between six million bales to seven million bales in 2020-2021.
The committee also recommended to the government to fix power tariff of agriculture tube well at Rs5.35 per unit and the government should announce 50 percent subsidy on installation cost of solar tube wells.
Economic Coordination Committee schedule to be held on December 30 will discuss broad based measures for textile industry. ECC will approve textile policy for the period of five years till 2025.
Meanwhile, Pakistan's top economic decision-making body, the Economic Coordination Committee (ECC), is expected to approve a new five-year textile policy in its meeting held on December 30 with incentives worth more than Rs900 billion ($5.6 billion) for the industry and an aim to increase exports to $21 billion in five years, officials have said.
Pakistan's textile businesses have received export orders for the next six months with the sector expanding production capacity to meet robust demand from foreign buyers, an industry official said on Monday.
Adil Bashir, chairman of All Pakistan Textile Mills Association (Aptma) said the textile sector is currently in the mode of rapid expansion to cater with increased orders and demands. "Exports orders for next 6 months are booked and despite COVID our exports have increased significantly compared to our regional competitors whose exports have shrunk," Bashir said in a statement.
Textile sector that accounts for more than 60 percent of total exports fetched $6 billion from abroad during the five months of the current fiscal year, up around five percent year-on-year, according to the Pakistan Bureau of Statistics.
Moreover, PRGMEA (NZ) vice chairman Adeeb Iqbal urged the government to also abolish duties on the import of fabrics as well as the denim fabric in line with the import relaxation provided on import of cotton yarn, as value-added garment sector is facing severe shortage of basic raw material of fabrics, which may lead to a drastic decline in value-added textile export.
He said that it was the right decision to remove Regulatory Duty on import of cotton yarn, which will accelerate the country's textile exports but unfortunately the garment, which is the major sector of textile chains, has been neglected, as the reduction in yarn import duty will not benefit it.
It is unfortunate that the government's cotton policy has reduced the country's cotton production target from 14 million bales to 9 million bales. Due to the shortage of cotton yarn textile exports were fallen in previous months. He said that the cotton crisis in Pakistan was the biggest threat to the value-added textile sector than corona. The government resolved the issue timely by abolishing import duty on yarn to avoid the closure of the textile industry and a loss of jobs of millions of workers, he said.
Naseem Usman told that cotton farmers are yet another group badly affected. Pakistan witnessed lowest national production which never happened in the last few decades, all because of non-performing seed varieties, outdated seed technologies and unfavourable climatic conditions for cotton plants. Again, the government could not come up with a solid plan to resolve these long-standing issues, especially the seed varieties and seed technology, he regretted.
He also told the government may need 2-3 billion of dollars on the import of cotton, wheat and sugar this year due to shortage in local production but the bill may further rise in the years to come if the government continues to ignore this sector.
Textiles make up more than half of Pakistan's exports, but have lost ground to South Asian neighbors in recent years, hurt by chronic energy shortages and underinvestment in machinery.
Naseem also told that Pakistan's textile sector has helped the country pass through a difficult phase, especially during 2020, which is still a threat to the entire world.
Covid-19 was the biggest challenge for the outgoing 2020, which disrupted global economies and their supply chains. Pakistan too felt the heat of the deadly virus, starting late February, but surprisingly within a couple of months, the country's textile industry was back on track.
He told that rate of cotton in Sindh was in between Rs 8800 to Rs 10,000 per maund. The rate of cotton in Punjab is in between Rs 9500 to Rs 10,300 per maund. He also told that Phutti of Sindh was sold in between Rs 4000 to Rs 4700 per 40 kg. The rate of Phutti in Punjab is in between Rs 4000 to Rs 5200 per 40 Kg.
The rate of Banola in Sindh was in between Rs 1500 to Rs 1825 while the price of Banola in Punjab was in between Rs 1600 to Rs 2200. The rate of cotton in Balochistan is Rs 9200 per maund.
The Spot Rate remained unchanged at RS 9950 per maund.
The Polyester Fiber was available at Rs 178 per Kg.
Copyright Business Recorder, 2020
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