KARACHI: The Spot Rate Committee of the Karachi Cotton Association on Thursday has increased the spot rate by Rs 100 per maund and closed it at Rs 10,500 per maund. The local cotton market remained bullish on Thursday. Market sources told that trading volume was a little bit low.
Cotton Analyst Naseem Usman told that Economic Coordination Committee (ECC) of the Cabinet on Wednesday has postponed the approval the new Textile and Apparel Policy (2020-25) till the next meeting.
After the approval the textile and apparel sectors will be allowed to claim subsidies on electricity through the proposed rebate mechanism of the Power Division.
Official sources told that the Ministry of Commerce moved a summary to the ECC titled, 'Textile and Apparel Policy (2020-25)'. On the summary of the Commerce Ministry to the ECC, Power Division has sought amendments in the Policy for changing mechanism for providing subsidy on electricity to the textile and other industries.
According to the summary of the Power Division to the ECC, electricity to the textile sector should be provided at the applicable notified rates (from the date of commencement of Textile and Apparel Policy (2020-25) and any subsidies should be claimed by the relevant textile companies on an ex-post basis through rebate mechanism from the concerned government department or agency directly.
Accordingly, the Power Division has proposed changes in the Textile and Apparel Policy (2020-25) regarding the chargeability of the electricity rates on the textile and other related sectors.
All Pakistan Textile Mills Association said that salient features of Textile Policy (2020-25) includes continuation of supply of energy at regionally competitive energy tariff of 7.5 cents / Kwh for electricity and $ 6.5/ MMBTU for RLNG /GAS fixed for policy period. Long term financing facility provided for the entire textile value chain.
All Pakistan Textile Mills Association (APTMA) Punjab Chairman Abdul Rahim Nasir has said that sustained supply of gas/RLNG [Regasified Liquefied Natural Gas) has helped maintain the momentum of enhanced exports, as currently the textile industry is working at its full capacity.
He said that export orders for the next six months had been received and despite COVID-19 pandemic, the overall exports of the country had registered a growth of more than 18 per cent in December 2020, compared to the corresponding period of the last year.
Earlier, in November 2020, the textile exports had surged by nine per cent as compared to November 2019, he added.
Rahim Nasir said, textile sector is currently in the mode of rapid expansion to cater to increased orders and demands.
He said it was essential to sustain the momentum, which was being facilitated by the upcoming textile policy.
He said there had been isolated cases of low pressure of gas and supply problems on mixed feeders and APTMA has taken up these issues with the Sui Northern Gas Pipelines Ltd (SNGPL) management, which assured the Association of all-possible assistance to remove the bottlenecks.
Meanwhile, value-added textile exporters have demanded the government to abolish customs duty on the import of cotton yarn in order to support the industry and ensure timely completion of export orders.
Pakistan Apparel Forum Chairman and former Pakistan Hosiery Manufacturers & Exporters Association (PHMA) central chairman Muhammad Jawed Bilwani said the gravity of situation demands the government to immediately abolish customs duty on import of cotton yarn either by passing through a presidential ordinance or by an immediate act of the parliament in the interest of export industry of the country.
He said that value-added textile exporters are highly perturbed over the unavailability of cotton yarn - which is basic raw material in the local market - at a time when huge export orders are available with the value-added sector.
Prime Minister's Advisor on Commerce and Investment, Abdul Razak Dawood, is reportedly seeking zero rating for entire textile chain in the Textile and Apparel Policy 2020-25 to be considered by the ECC in its upcoming meeting. The Ministry of Commerce, has proposed $ 900 billion incentives for the textile chain in five years.
"Tariff structure of entire textile and apparel chain including MMF and cotton based value-chains will be rationalized on priority followed by accessories and dyes and chemicals," the sources added.
Custom duty drawback rate of textile and apparel products will be reviewed taking into account additional customs and regulatory duties. Temporary importation schemes will be simplified in perspective of SMEs. Ministry of Commerce will ensure common warehousing, including indirect exporters in temporary importation schemes and pursue FBR to devise new temporary scheme to cater to fast fashion trends.
Moreover, ICE cotton futures rose more than 2% on Tuesday to climb above the 80-cent level for the first since December 2018, helped by fund buying and a sagging US dollar.
The cotton contract for March was up 1.55 cents, or 2%, at 80.52 cents per lb by 12:57 p.m. EST (1757 GMT). It traded within a range of 78.97 and 80.72 cents per lb.
The contract is up for a ninth straight session.
"The funds are big buyers today," said Jack Scoville, vice president at Chicago-based Price Futures Group, adding a weaker dollar is also helping cotton.
"The production in the last WASDE report was significantly reduced, and there are expectations that the USDA will reduce a little bit more. Demand has held up really strong and that's bringing ideas of reduced ending stocks estimate."
According to a report, released by Pakistan Cotton Ginners Association more than 53 lac bales were produced in the country which is 34.01 percent less as compared to more than 81 lac bales produced till January 3 last year.
Naseem Usman told that 200 bales of Ghotki were sold at Rs 10,600 per maund, 600 bales of Saleh Pat were sold at Rs 10,300, 2200 bales of Khan Pur were sold at Rs 10,950 to Rs 11,000, 3600 bales of Rahim Yar Khan were sold at Rs 10,500 to Rs 11,000, 800 bales of Sadiqabad were sold at Rs 10,800, 400 bales of Liaquat Pur were sold at Rs 10,700, 800 bales of Haroonabad were sold at Rs 10,500 to Rs 10,550, 1200 bales of Mian Wali were sold at RS 10,200 and 600 bales of Yazman Mandi were sold at RS 10,100.
Naseem also told that rate of cotton in Sindh was in between Rs 9700 to Rs 10,400 per maund. The rate of cotton in Punjab is in between Rs 9800 to Rs 10,500 per maund. He also told that Phutti of Sindh was sold in between Rs 3800 to Rs 4700 per 40 kg. The rate of Phutti in Punjab is in between Rs 4000 to Rs 5500 per 40 Kg.
The rate of Banola in Sindh was in between Rs 1600 to Rs 2000 while the price of Banola in Punjab was in between Rs 1750 to Rs 2200. The rate of cotton in Balochistan is Rs 10,000 per maund.
The Spot Rate Committee of the Karachi Cotton Association has increased the spot rate by Rs 100 per maund and closed it at Rs 10,500 per maund. he Polyester Fiber was available at Rs 183 per Kg.
Copyright Business Recorder, 2021