KARACHI: The local cotton market bearish on Wednesday. Market sources told that trading volume was low.
ICE cotton futures rose on Tuesday, supported by firmer stock markets and increased optimism surrounding a large fiscal stimulus in the United States, although a stronger dollar kept prices in check.
The cotton contract for March rose 0.51 cent, or 0.6%, to 80.54 cents per pound by 12:43 p.m. EST (1743 GMT). It traded within a range of 79.8 and 81.01 cents a pound.
“There is a little bit of spec buying. The stock markets are higher. Coronavirus vaccines are getting around and it looks like we are going get stimulus of some kind,” said Jack Scoville, vice president at Chicago-based Price Futures Group.
Also, “fundamentally we deserve higher prices, (as) our ending stocks levels are significantly less, we have less production here and good demand,” he added.
Global stock markets surged for a second day on Tuesday, spurred by hopes around more US stimulus and swift economic recovery.
Cotton Analyst Naseem Usman told that Pakistan Cotton Ginners Association fortnightly report till February 1 shows a decline of 34.35% as compared to the last years production during this year.
In a bid to revive cotton crop in the country, the government was determined to providing 100 percent certified, pest resistant and climate tolerant high yielding seed varieties to farmers during coming season.
In this regard, Federal Seed Certification and Registration Department has completed testing of 30,000 tons cotton seeds of different varieties.
Initiative was started to fulfil the domestic requirements of certified seed in order to enhance per-acre output of the major cash crop of the country as well as enhancing the farmers income for economic growth and social prosperity, said Dr Zahid Director Pakistan Central Cotton Committee (PCCC).
Dr Zahid said that government was determined to fulfil 100 percent local seed requirements by providing them certified seeds during coming season.
He said the local cotton seeds requirements were estimated at 40,000 tons and out of the total 30,000 tons of seeds had already been screened in federal agency in order to ensure strict compliance of use of certified seed.
Chief Minister Sardar Usman Buzdar said that the government will provide every facility to cotton growers as the increase in the cotton crop will help produce job opportunities along with increasing exports.
Talking to the president of DG Khan Chamber of Commerce and Industry K. Jalaluddin Rumi, the CM appreciated the efforts of the traders’ community for setting up almonries in the area of Koh-e-Suleman. It was decided to establish this facility in other areas after Fazala Kach, Vohwa and Dabar Sakhi Sarwar.
Naseem told that Pakistan is struggling to achieve a decent cotton output this year if the arrival of 5.5 million bales reported by the Pakistan Cotton Ginners Association (PCGA) on Jan 18 is any guide.
Overall, the country’s cotton production is estimated to decline during the present marketing year by almost a third to 5.7m bales from 8.3m bales last year and 60pc from 13.9m bales in 2014. The cotton arrivals from Punjab are reported to have dropped by 30.6pc and Sindh by 38.7pc.
According to PCGA Chairman Jassu Mal, the phutti arrivals at the ginning factories are the lowest in more than three decades resulting in the closure of 800 factories out of a total of 1,200, loss of tens of thousands of jobs and reduced income for cotton-picker women.
There are multiple factors for the decline in the production of cotton, which provides livelihoods to 1.2m farmers who grow the white gold on around 8m acres mainly in Punjab and Sindh. A large part of the rural economy, and textile & clothing exports, which constitute nearly 60pc of the country’s total overseas shipments, are dependent on locally grown cotton.
The massive fall in the cotton production, according to the Pakistan Bureau of Statistics (PBS) data for the first half of the current fiscal year, has led the textile industry to import 331,560 tonnes of cotton worth $532.1m compared with the last year’s imports of 49,573 tonnes valuing at $86.9m.
Naseem told that on 31st January 2021, Last day of first Month of New year, Indian Cotton Crop year Today Completed 123 days 34% Days.
Estimated New Cotton crop Arrival during This period Touched 235 lakh Bales of 170 kg.65% of estimated Crop that is 360 lakh Bales.
Naseem told that 400 bales of Chichawatni were sold at Rs 11,000 per maund, 1200 bales of Fort Abbas were sold at Rs 10,800 to Rs 10,950 per maund, 200 bales of Donga Bonga were sold at Rs 10,800 per maund and 3200 bales of Multan were sold at Rs 10,725 per maund.
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 11,000 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 3500 to Rs 5400 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 rate of Polyester Fiber was increased by 2 per kg and was available at Rs 195 per Kg.
Copyright Business Recorder, 2021