KARACHI: The local cotton market remained stable on Friday. Market sources told that trading volume was a little bit low.
Cotton Analyst Naseem Usman told the Economic Coordination Committee (ECC) of the Cabinet postponed the approval of the new Textile and Apparel Policy (2020-25) till the next meeting.
The government is set to unveil an ambitious Textile and Apparel Policy 2020-25 laden with cash subsidies and lower rates on utilities worth Rs960 billion to boost production and exports of value-added textile products.
The proposed policy, which will be the third such policy estimates three scenarios that the measures will lift the textile and clothing exports to a minimum of $15.7bn and a maximum of $20.8bn by end of the year 2025.
Well-placed sources told that the Federal Board of Revenue (FBR) has sought one week’s time to analyze the revenue implications of the proposed measures under the policy. One of the major recommendations of the textile division is the restoration of the zero-rated regime for the five export-oriented sectors. The facility was withdrawn in the year 2019.
The FBR will take up the issue of a zero-rated regime revival with the International Monetary Fund,” the sources said, adding the stakeholders also want its revival to cope with the impact of Covid-19.
Meanwhile, The Pakistan Readymade Garments Manufacturers and Exporters Association has endorsed the demand of PM Advisor on Commerce Abdul Razak Dawood to seek zero-rating regime for whole textile chain in the Textile and Apparel Policy 2020-25, stating the apparel sector is eagerly waiting for the approval of it from the ECC to make future marketing plan in the light of new policy.
PRGMEA central chairman Sohail A. Sheikh and chief coordinator Ijaz Khokhar, in a joint statement issued observed that restoration of the zero-rating status of the textile sector is vital to maintain the momentum of present enhanced exports, as currently the sector is working at full capacity to meet the high demand of export orders.
Naseem also told that a Parliamentary Committee on China-Pakistan Economic Corridor (CPEC) was held at the National Agriculture Research Centre, Islamabad under the Chairmanship of Sher Ali Arbab, MNA.
The Committee was briefed by the Secretary, Ministry of National Food Security & Research and Chairman, Pakistan Agricultural Research Council regarding Pakistan Agricultural Research Council and other projects related to the agriculture sector.
The Chairman, Pakistan Agricultural Research Council (PARC), while sharing 10 years development targets under CPEC, briefed the Committee that PARC’s aim is to change Pakistan from a cotton import country to a cotton export country and save foreign exchange of US $1.5 billion.
Besides renovation of existing orchards, the introduction of new varieties, reducing post-harvest losses, improving value chain and development of rural industries are major proposed interventions.
Moreover, ICE cotton futures edged up on Thursday, holding near the previous session’s multi-year peak, as market participants expect next week’s USDA monthly supply/demand report to show a drop in ending stocks.
The cotton contract for March rose 0.20 cent, or 0.3%, to 80.26 cents per lb by 11:48 a.m. EST (1648 GMT).
The contract touched its highest level since December 2018 at 80.93 cents on Wednesday.
“The crop is going to be lower and the ending stocks are going to be lower” and these expectations are supporting the market, said Louis Barbera, partner, and analyst at VLM Commodities Ltd.
The closely followed monthly World Agricultural Supply and Demand Estimates (WASDE) report by the US Department of Agriculture is due on Jan. 12.
Meanwhile, the USDA’s weekly export sales report showed that net sales of 153,100 running bales (RB) for 2020/2021 were down 47% from the previous week, while exports of 270,000 RB were down 2%.
Louis Rose, director of research and analytics at Tennessee-based Rose Commodity Group, in a note, attributed the gain in prices to drought across West Texas and projections of lower cotton acreage in 2021.
Naseem told that 2000 bales of Dherki were sold at Rs 10,700 to Rs 11,000 per maund, 600 bales of Ghotki were sold at Rs 10,500 to Rs 10,600, 600 bales of Mir Pur Mahelo were sold at Rs 10,600, 1400 bales of Haroonabad were sold at Rs 10,550 to Rs 11,000, 400 bales of Lodhran, 600 bales of Rahim Yar Khan were sold at Rs 11,000, 400 bales of Bagho Bahar, 400 bales of Khan Pur were sold at Rs 10,950, 200 bales of Kichi Wala were sold at Rs 10,550, 200 bales of Chicha Watni, 800 bales of Marrot, 200 bales of Mian Wali, 20 bales of Shuja Abad were sold at Rs 10,500 and 1600 bales of Yazman Mandi were sold at Rs 10,200 to Rs 10,500.
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 remained unchanged at Rs 10,500 per maund. The Polyester Fiber was available at Rs 183 per Kg.
Copyright Business Recorder, 2021