KARACHI: The local cotton market remained stable on Thursday. Market sources told that trading volume was satisfactory.
Cotton Analyst Naseem Usman told that according to the fortnightly report released by Pakistan Cotton Ginners Association till February 15 cotton production decline by 34.29% as compared to the last year’s production during this period.
Naseem also told that Textile and clothing exports increased over eight per cent to $8.76 billion on a year-on-year basis in the seven months of the current fiscal year, according to data released by the Pakistan Bureaus of Statistics on Wednesday.
The July-January figures showed that growth in textile and clothing exports came from the value-added sector.
In January, the export from the sector posted 10.79pc growth to $1.32bn as against $1.19bn over the corresponding month of last year.
The improvement in the value-added sector helped increase overall exports by 5.62pc to $14.25bn on a year-on-year basis.
Commerce Adviser Razak Dawood told Dawn that the growth was the outcome of the policy measures that the government took in the last over two years. Prior to the PTI government, Mr Dawood said, industries were closing down in Faisalabad.
He went on to recall the measures like abolishing of duty and taxes on industrial raw materials as well as paying off past pending refunds to exporters. The devaluation of the rupee and lower interest rate accelerated industrial growth, especially in the export-oriented industries.
Mr Dawood said that it was his government’s policy to provide uninterrupted electricity and gas to the export sector.
On the issue of delay in textile policy, the adviser said that the government is looking into various options on how to support small exporters. The delay, he added, is only because of this reason.
The government has decided to announce a five-year textile policy laden with over an Rs1 trillion support for the sectors.
In order to restore the declining output of cotton as well as encouraging the growers to bring maximum area under crop production, the government was working on a scheme of incentive for the provision of all major inputs on subsidized rates during current Kharif Season.
“Under the subsidy scheme, government would provide over Rs 2 billion subsidy to cotton growers across the crop sowing areas in the country for ensuring easy credit availability for purchasing inputs including certified seeds, fertilizers and pesticides during coming season”, Cotton Commissioner in the Ministry of National food Security and Research Dr Khalid Abdullah said.
He said that aim of the initiative was the revival of local cotton crop that was on declining trend from last many years, besides encouraging the growers to cultivate cotton that would significantly contribute in sustainable economic development of the country.
All Pakistan Textile Mills Association appealed to the Prime Minister of Pakistan do not let the functional and delivering textile industry to be derailed by policies to facilitate rent seekers IPPS and other monopolies.
Moreover, Former chairman and spokesman of Federal B Area Association of Trade and Industry (FBAATI) Idrees Gigi said textile exporters were not able to work at their full potential due to shortage of cotton yarn. Cotton production remained less than 15 million bales.
Limited to 5.5 million bales, the price of cotton is skyrocketing due to shortage in the country and exporters are currently facing uncertainty, cotton to the textile sector due to easy availability of raw materials. Export of yarn should be banned completely and duty free import of yarn should be allowed.
A huge number of export orders are being received by the value-added garment industry, however, exporters are not accepting these orders for the calendar year 2021 due to skyrocketing price of fabrics in the country along with short availability, especially of the denim fabric.
According to the press statement issued by the Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) Vice Chairman Adeeb Iqbal, government should abolish all duties on the import of fabrics in line with the import relaxation provided on import of cotton yarn, as value-added garment sector is facing severe shortage of basic raw material of fabrics, which may lead to a drastic decline in value-added textile export.
“We want duty-free import of fabric along with yarn, as the cotton prices find no respite from an unabated spike with the industrial input trading at season’s highest rates because its muted local production continues to widen demand and supply gap,” he added.
Cotton Analyst Naseem Usman told that the fertilizer companies have increased prices of DAP by Rs 300 per bag. Earlier, Fauji Fertilizer Bin Qasim Limited (FFBL) had increased its DAP prices by Rs550 per bag. The company has increased its prices due to increased demand globally and the reduction in supply from China. Now, DAP prices are again up due to increased demand globally. After the increase, FFBL primary DAP margins had increased to a record high of USD230/ton, which was last seen in 2015 as phosphoric acid remained stable at USD689/ton.
Naseem Usman also told that Pakistan has said that it has no plans to allow duty-free import of cotton from India to bridge the shortfall.
The country is currently facing a shortfall of one million bales due to low production this year.
Talking to journalists adviser to Prime Minister on Commerce Abdul Razak Dawood said that people from the industry had been demanding revision in duties and taxes on the textile sector.
However, he ruled out any change in duties on import of cotton from India to bridge the shortfall. He hoped that the country would produce a better cotton crop next year.
Responding to a question, the adviser said that the government would restore the zero-rated regime for the five leading export-focused sectors in the upcoming budget.
Talking about trade with Afghanistan and Central Asian states, he said that Afghanistan had offered a preferential trade agreement (PTA), which was not a problem.
Naseem Usman told that 900 bales of Saleh Pat were sold at Rs 10,600 per maund, 1600 bales of Rohri were sold at Rs 10,660 to Rs 10,800 per maund, 1200 bales of Rajan Pur were sold at Rs 11,200 to 11,500 per maund, 400 bales of Haroonabad, 200 bales of Sadiqabad were sold at Rs 11,200 per maund, 200 bales of Layyah, 400 bales of Rahim Yar Khan were sold at Rs 10,700 per maund, 400 bales of Yazman Mandi were sold at Rs 10,500 per maund and 424 bales of Ahmed Pur East were sold at Rs 10,350 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 11,000 per maund.
The Spot Rate remained unchanged at Rs 11,000 per maund. The Polyester Fiber was available at Rs 197 per Kg.
Copyright Business Recorder, 2021