KARACHI: The local cotton market remained stable on Tuesday. Market sources told that trading volume was low. ICE cotton futures fell on Monday to a one-week low as investors liquidated positions ahead of a federal supply and demand report, while a rising US dollar further weighed on the natural fiber.
The cotton contract for March fell 0.41 cent, or 0.5%, to 79.36 cents per lb by 11:13 a.m. EST (1613 GMT), having touched its lowest since Jan. 4 at 78.65 cents earlier in the session.
It traded within a range of 78.65 and 80.25 cents a lb.
"Lot of people are pulling off long positions ahead of the USDA reports tomorrow. Nobody knows what the USDA is going to say and even though the reports are expected to be kind of friendly to the market, we are unsure," said Jack Scoville, vice president at Chicago-based Price Futures Group.
The highly anticipated US Department of Agriculture's (USDA) monthly World Agriculture Supply and Demand Estimates (WASDE) report is due on Tuesday.
Cotton Analyst Naseem Usman told that Pakistan Cotton Ginners Association has requested the Prime Minister Imran Khan to establish an autonomous Cotton Control Board which must be supervised directly by Prime Minister to increase production by 20 million bales. It should be monitor research, sowing, pest management, picking, ginning, spinning to value addition to protect the interests of all stake holders.
Zoning for cotton crop must implement in letter and spirit and there should be restrictions on sowing other crops than cotton. To ensure availability of certificated, germinated, heat and disease resistant cotton seed.
Ginning sector must be acknowledged as a vital subsidiary of textile industry and uniform electricity tariff should be introduced by for ginning industry to reduce the cost of manufacturing.
Government must announce the support price of seed cotton (Phutti) before sowing.
PCGA warned that if these submissions were not honoured then 1200 ginning factories and millions of people attached will be effected.
A meeting of the Standing Committee on National Food Security and Research was informed on Monday that the Pakistan Central Cotton Committee (PCCC) has been facing financial constraints as the committee members said increase in cotton production was important for exports.
The meeting of the Standing Committee presided over by Rao Muhammad Ajmal Khan was given briefing by the PCCC commissioner regarding issues of the PCCC.
He informed the meeting that there was poor financial condition in the department, and 10 percent increase of pay and pensions were not paid to the employees and the retired persons.
Land lease issues of the CCRI Multan, building rent issue of the PICRT Karachi, and ownership issue of CRS Sahiwal and Bahawalpur have also been laced to the department.
Pakistan Readymade Garments Manufacturers & Exporters Association (PRGMEA) on Monday called for the final approval of new textile policy 2020-25 by the Economic Coordination Committee (ECC) of the Cabinet as it is vital for new investment and marketing plan in this major export-oriented sector.
PRGMEA north zone chairman Adeeb Iqbal Sheikh said that Prime Minister Imran Khan has already approved the five-year textile policy for onward submission to the ECC. However, the ministry was unable to oblige due to undisclosed reasons.
Naseem told that the rate of cotton reached at ten year high of Rs 11000 per maund. Bullish trend was witnessed in the international cotton market.
Naseem also told that Economic Coordination Committee (ECC) of the Cabinet postponed the approval 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 analyse 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 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.
Naseem told that 200 bales of Dherki were sold at RS 10,700 per maund, 200 bales of Rahim Yar Khan, 600 bales of Shadan Lund, 200 bales of Chicha Watni, 200 bales of Faqeer Wali, 200 bales of Liaquat Pur were sold at Rs 11,000, 800 bales of Hasil Pur were sold at Rs 10,000 to RS 10,800, 2400 bales of Yazman Mandi were sold at Rs 10,200 to Rs 10,450, 200 bales of Mian Chanu and 200 bales of Chistian were sold at Rs 10,000.
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 5000 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 1800 to Rs 2200. The rate of cotton in Balochistan is Rs 10,000 per maund.
The Spot Rate remained unchanged at Rs 10,600 per maund. The Polyester Fiber was available at Rs 188 per Kg.
Copyright Business Recorder, 2021