KARACHI: The local cotton market remained stable on Friday. Market sources told that trading volume was low.
ICE cotton futures rose on Thursday, hovering near an over two-year high scaled in the last session, on an upbeat weekly export sales report and a slight dip in the dollar.
The cotton contract for March rose 0.39 cent, or 0.5%, to 81.31 cents per lb by 12:37 p.m. EST (1737 GMT).
“We had a very good export sales report indicating that demand is still there and business is going on,” said Jim Nunn, owner of Tennessee cotton brokerage Nunn Cotton.
The US Department of Agriculture’s weekly export sales report showed net sales of 326,000 running bales for 2020/2021, up 113% from the previous week and 2% from the prior four-week average.
“The dollar index is a little bit lower than what it was on Wednesday and we’re seeing some strengthening in the Brazilian real too, which helps US crops be more competitive,” Nunn said.
The US dollar fell 0.1% against key rivals, making greenback-denominated cotton less expensive for investors holding other currencies.
Cotton Analyst Naseem Usman told that a meeting of the Economic Coordination Committee (ECC) of the Cabinet scheduled for Wednesday has been delayed till Friday as the finance minister and other members of the economic team have been busy in meetings on power and agriculture sector in the Prime Minister’s Office.
The meeting was also to take up Textiles and Apparel Policy, 2020-25 moved by the Commerce Ministry and National Freight and Logistics Policy (NFLP) of Pakistan Communications.
The summaries related to the Textile and Apparel Policy (2020-25) and the NFLP were deferred to the next ECC for comprehensive consultation process with the key stakeholders.
Meanwhile, Federal B Area Association of trade and industry (FBATI) has demanded immediate removal of all taxes and duties imposed on cotton import.
Textile industrialists say that despite large export orders in the country’s value-added textile sector, textile exporters are not able to operate at their full potential due to shortage of cotton yarn.
The Trump administration announced an import ban on all cotton and tomato products from western China’s Xinjiang region on Wednesday over allegations that they are made with forced labor from detained Uighur Muslims.
U.S. Customs and Border Protection said the order applies to raw fibers, apparel and textiles made from Xinjiang-grown cotton, as well as canned tomatoes, sauces, seeds and other tomato products from the region, even if processed or manufactured in third countries.
The agency, which is part of the Department of Homeland Security (DHS), estimates that about $9 billion of cotton products and $10 million worth of tomato products were imported from China into the United States in the past year.
As per the latest data shared by Advisor to Prime Minister on Trade and Investment Abdul Razak Dawood, the figures for Jul-Dec 2020 show that the exports of Home Textiles increased by 16% to USD 2,017 million, Readymade Garments by 25% to USD 1,181 million and Tents/Canvas by 57% to USD 62 million.
“It is heartening to note that the textile sector is maintaining its export growth,” said Dawood in a series of tweets on Wednesday.
The advisor added that “it is even more encouraging to note that the non-textile sector exports are also showing healthy growth.”
During Jul-Dec 2020, the exports of pharmaceuticals increased by 25% to USD 138 million, Ethyl Alcohol (Industrial) by 14% to USD 182 million, Tobacco and Cigarettes by 84.50% to USD 29 million and Processed Food by 120% to USD 25 million.
Moreover, Towel Manufacturers’ Association (TMAP) of Pakistan chairman Feroze Alam Lari said despite of big export orders available with the value-added textile sector of the country, the textile manufacturers and exporters cannot operate to their capacity due to shortage of cotton yarn, which is basic raw material for the textile industry.
It was very dangerous for the national economy that cotton production has fallen to 5.5 million from 15 million bales. Due to scarcity of cotton yarn in the country its price touched the sky and the cost of cotton yarn reached its peak during the current decade and the bullish trend of cotton yarn price pushing the exporters towards unviable situations and un-competitiveness in the international market.
However, few days back authority only removed 5 percent regulatory duty on import of cotton yarn which helped little bit to the export oriented sector, but now we as an association request to the concern authority to kindly abolish all taxes and duties on import of cotton yarn which will be the life line for the value added textile industry.
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 certified, 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 affected.
Naseem Usman told that 200 bales of Rahim Yar Khan were sold at Rs 11000 per maund, 600 bales of Haroonabad were sold at Rs 10,900 to Rs 11,000 per maund, 200 bales of Khan Pur were sold at Rs 10,800 per maund, 400 bales of Dharan Wala were sold at Rs 10,700 per maund, 400 bales of Yazman Mandi were sold at Rs 10,550 per mand and 600 bales of Fort Abbas were sold at Rs 10,500 per maund.
Naseem also told that rate of cotton in Sindh was in between Rs 9700 to Rs 10,700 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 2250. The rate of cotton in Balochistan is Rs 10,000 per maund.
The Spot Rate remained unchanged at Rs 10,700 per maund. The Polyester Fiber was available at Rs 188 per Kg.
Copyright Business Recorder, 2021