KARACHI: The Spot Rate Committee of the Karachi Cotton Association on Tuesday has increased the spot rate by Rs 200 per maund and closed it at RS 11,300 per maund.
The local cotton market remained bullish on Tuesday. Market sources told that trading volume was satisfactory.
Cotton Analyst Naseem Usman told that Pakistan has historically possessed some of the highest power tariffs in the region, which have not only hindered competitiveness over the years, but also raised pertinent questions about affordability. Our country’s energy tariffs have not been commensurate with the income levels of the general population, nor with regionally prevailing tariffs. Despite unreliable energy supply and higher tariffs, the textile sector has been operating at full capacity and receiving increased orders, leading to the revival of non-operational units, and the creation of new jobs.
Textiles have been heavily supporting the economy, yet the industry’s profitability is being hampered by illogical energy tariff hikes and policies. In the past, the textile sector commended the Prime Minister for making Pakistan’s energy tariffs competitive with those in Bangladesh and India, but the current rate is 9 cents/Kwh which is well above average of 7 cents in the region.
The government has offered to offset the high energy tariffs with a DLTL package, but this is an unsustainable solution as only direct exporters can benefit from it, whereas 80% of textiles comprise the chain as pictured below (Figure 1). Given the higher energy tariffs of our region, a domestic producer will not opt for local inputs while they can import them cheaply and without duty through DTRE and Bond. This policy, if followed through, will lead to rapid deindustrialization.
Naseem Usman said that member Punjab Agriculture Committee and Director Pakistan Textile Council Khawja Jalal uddin Roomi gave a proposal that government should fix the support price of cotton at the rate of Rs 4500 per maund and gave a subsidy of Rs 15000 per acer to the cotton farmers.
Naseem also told that All Pakistan Textile Mills Association has appealed to the Prime Minister of Pakistan that government should not let the functional and delivering textile industry to be derailed by policies to facilitate rent seekers IPP’S and other monopolies.
Moreover, PHMA is expected to call a protest in the near future in view of the growing cotton yarn crisis. Group Leader Chaudhry Salamat Ali and Senior Vice Chairman of PHMA Mian Farrukh Iqbal said this while addressing a press conference at the office of Pakistan Hosiery Manufacturers and Exporters Association (PHMA).
They demanded that Prime Minister of Pakistan Imran Khan and his team should immediately formulate a strategy to overcome this cotton yarn crisis so that thousands of workers can avoid becoming unemployed. If the government does not address the artificial cotton yarn crisis on an emergency basis and take no action against this mafia, not only will thousands of workers lose their jobs in the next few weeks, and we will have no choice but to take to the streets for the labours and my rights.
Federal Minister for National Food Security and Research Syed Fakhar Imam on Friday said that the government will provide subsidy on cotton seeds, fertilisers and whitefly pesticides and it will be distributed among the farmers through the provincial governments.
Talking to reporters, Imam said that the Economic Coordination Committee (ECC) of the Cabinet has approved the subsidy and it will be distributed directly to the farmers through the provinces.
He said that cotton, which is one of the most important crops, was severely affected this year.
The government has taken three major steps for betterment of cotton crop including provision of subsidy on cotton crop, cotton seeds, fertiliser and whitefly pesticides.
The government is making efforts to ensure proper use of technology, agricultural research, and eliminate role of middlemen in the agriculture sector, he said.
To a question regarding substandard seeds, he said that an effective crackdown has been launched against fake seed companies which were producing low quality and counterfeit seeds.
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 according to sources and media reports many cabinet members and Special Assistants to Prime Minister have come out to sabotage the vision of Prime Minister Imran Khan about increasing the country’s exports as their ‘principled stance’ has resulted in deadlock on the Textile Policy 2020-25, officials and industrial sources involved in talks confided to The News.
Naseem Usman told that 1371 bales of Mir Pur Mathelo were sold at Rs 11,250 to Rs 11,300 per maund, 600 bales of Ghotki were sold at Rs 11,250 to Rs 11,300 per maund, 286 bales of Saleh Pat were sold at Rs 11,000 per maund, 969 bales of Shahdad Pur were sold at Rs 9100 per maund, 400 bales of Rahim Yar Khan were sold at Rs 12,000 per maund, 200 bales of Faqeer Wali, 200 bales of Fort Abbas were sold at Rs 11,400 per maund, 200 bales of Haroonabad were sold at Rs 11,200 per maund and 200 bales of Yazman Mandi were sold at Rs 11,000 per maund.
Naseem also told that rate of cotton in Sindh was in between Rs 10,200 to Rs 11,000 per maund. The rate of Phutti in Sindh is in between Rs 4000 to Rs 5900 per 40 kg.
The rate of cotton in Punjab is in between Rs 10,300 to Rs 11,100 per maund. The rate of Phutti in Punjab is in between RS 4000 to Rs 5900 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 Committee of the Karachi Cotton Association has increased the spot rate by Rs 200 per maund and closed it at RS 11,300 per maund. The Polyester Fiber was available at Rs 205 per Kg.
Copyright Business Recorder, 2021
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