KARACHI: The local cotton market bullish on Friday. Market sources told that trading volume was increased.
ICE cotton futures rose over 1% on Thursday to more than a two-year high on the back of a weaker dollar and a rally in global equities, while investors were looking forward to the US weekly export sales report.
The cotton contract for March was up 1.00 cent, or 1.2%, to 82.59 cents per lb at 1:21 p.m. EST (1821 GMT), having touched its highest level since September 2018 at 83.06 cents. It traded within a range of 81.40 and 83.06 cents a lb.
“The dollar is down a little bit, soybeans and corn are up, the stock markets are up a little bit, so cotton is following some other markets. There are expectations for really good sales (report) tomorrow,” said Rogers Varner, president of Varner Brokerage in Cleveland.
The weekly export sales report from the United States Department of Agriculture (USDA) is due on Friday.
Meanwhile, Chief Executive Officer (CEO) Lesco Ch Muhammad Amin has assured All Pakistan Textile Mills Association (Aptma) Punjab Chairman Abdul Rahim Nasir that Lesco will ensure that all industry in general and export industry in particular gets electricity supply without any interruptions or power fluctuations.
He said this while talking to Aptma delegation led by association Chairman Abdul Rahim Nasir. Aamir Sheikh, Senior Vice Chairman, Aptma Punjab and Mohammad Raza Baqir, Secretary-General and Executive Director Aptma were also included.
Rahim Nasir apprised Lesco management that the present capping of 5MW for B3 industrial consumers and requirement for separate grid connection for load beyond 5MW is obstructing further investment. Even meagre additional load of 500kW to 1MW entails heavy investment and financial cost.
Cotton Analyst Naseem Usman told that the words “highest” and “lowest” ever(s) have fast become clinches when it comes to Pakistan’s cotton industry. Few will be surprised to find out that at 4.75 million bales, Pakistan recorded its highest ever calendar year cotton import volume in 2020. That the country will record its lowest (in 36 years) domestic cotton output in 2020-21 season has also been repeated – especially in this space – ad nauseum. But missing from this discussion of peaks and bottoms is the matter of pricing, which may soon ring alarm bells for the ballooning import bill.
Pakistan’s spinning industry should be commended for taking full advantage of the downward slide in global commodity markets that began with the onset of the Covid pandemic (and the ensuing lockdown). Importers were able to average out their pricing, procuring raw material at lowest unit prices since at least 1HFY18, which also helped induce growth in exports by the value adding industry. But the bonhomie may not last.
Domestic cotton output of less than 6 million bales in 2020-21 means that the import volume recorded during the year of pandemic (CY20) may only be the tip of the ice-berg. During 2HFY21, Pakistan may have to brace itself for import of another 4 million bales, which may not only balloon the fiscal year cotton import bill to the tune of $2 billion but may also affect the competitiveness of value adding segment.
Cotton Analyst Naseem Usman told that announcement of textile policy 2020-25 has been deferred once again. He also told that textile exports during 1HFY21 increased by 7.8 percent year on year against a growth of 5 percent in total exports during the period. The sector’s share in total exports stood at 61 percent for 1HFY21, which is not different from sector’s weight in exports over at least the last year or so. Much of the growth in textile exports is attributable to the growth seen in the last four months. December 2020, - the latest month – saw the highest ever monthly exports at $1.4 billion, a growth of almost 23 percent year-on-year. The upward trend can also be seen from the total textile group exports rising by over 9 percent month-on-month in December 2020.
Naseem told that cotton production decline by 34.15% according to the report released by Pakistan Cotton Ginners Association on January 15.
Naseem told that 200 bales of Shahdad Pur were sold at Rs 8475 per maund, 400 bales of Ghotki were sold at Rs 10,700, 3000 bales of Sukhar were sold at Rs 10,500, 200 bales of Tunsa Shareef were sold at Rs 11,200 (seed), 2200 bales of Khan Pur, 800 bales of Sadiqabad, 600 bales of Bagho Bahar, 200 bales of Dharan Wala, 400 bales of Dera Ghazi Khan were sold at Rs 11,000, 2400 bales of Harronabad were sold at Rs 10,850 to Rs 10,900, 600 bales of Liaquatabad were sold at Rs 10,900, 1400 bales of Bahawal Nagar were sold at RS 10,850, 1000 bales of Yazman Mandi were sold at Rs 10,800, 400 bales of Faqeer Wali were sold at Rs 10,500, 1000 bales of Fort Abbas were sold at Rs 10,850 and 200 bales of Multan were sold at Rs 10,600.
Naseem also told that rate of cotton in Sindh was in between Rs 10,000 to Rs 10,700 per maund. The rate of cotton in Punjab is in between Rs 10,200 to Rs 11000 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 10,800 per maund. The Polyester Fiber was available at Rs 191 per Kg.
Copyright Business Recorder, 2021
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