KARACHI: The local cotton market remained stable on Thursday. Market sources told that trading volume was low because the stock of the cotton was low and the production of the cotton is very low.
ICE cotton futures fell more than 2% on Wednesday, tracking weakness in broader financial markets and as analysts said that the US fibre was facing headwinds from cheaper Indian and African exports.
Cotton contracts for May fell 2.45 cent, or 2.7% to 88.54 cents per lb, by 1:22 p.m. ET (1822 GMT). It traded within a range of 88.44 and 91.13 cents a lb.
The contract rallied to over 2-1/2-year highs last week but has slipped as much as 7.5% from that peak.
“The market has room to move a bit lower because the rally (has) ran into major resistance on the demand side,” said Ed Jernigan, chief executive of Jernigan Global, a cotton textile supply chain manager.
The cotton production in the country witnessed an alarming decline of 34.18 percent shortfall as compared to corresponding period of 2020 when arrivals comprised over 8.5 million bales.
According to the statistics released by Pakistan Cotton Ginners Association till March 1, on Wednesday exactly 5,631,191 bales underwent the ginning process i.e. conversion to bales. Cotton arrivals in Punjab were recorded at over 3.5 million or 3,501,580 bales, while Sindh generated just over 2.1 million or 2,136,169 bales.
Cotton arrivals in Punjab were recorded at over 3.5 million or 3,501,580 bales which is 1.5 million bales less as compared to the last years production of more than 5 million bales.
Cotton arrivals in Sindh were recorded 2.1 million or 2,136,169 bales which is 38.52 percent less as compared to the last year’s production of more than 3.4 million bales.
Just over 5.4 million or 5,446,141 bales were sold out with major chunk of it, 5.37 million (5,375,941) bales, bought by textile mills and 70,200 by exporters. Exactly 191.608 bales were lying unsold at the ginneries.
Amid the decline in cotton production in Pakistan, the textile exporters are urging the government to allow import of cotton from neighboring India.
Ijaz Khokhar, chief coordinator of the Pakistan Readymade Garments Manufacturers and Exporters Association told Arab News, that they have approached the Advisor to Prime Minister on Trade and Investment Abdul Razak Dawood in this regard.
“We have requested him (Dawood) to allow the import of cotton for at least a brief period of four to six months since that will allow us to deliver our export orders without delay,” he said, adding that the prime minister’s aide had “agreed to look into the matter.”
Khokhar informed that the local exporters cannot use Chinese cotton due to the US embargo. Earlier, Dawood said people from the industry had been demanding to make changes in duties and taxes in textile sector. However, he ruled out any changes in duties and import of cotton from India to bridge shortfall. He hoped that the country would have better cotton crop next year.
Former Chairman of All Pakistan Cotton Power Looms Association, Chaudhry Muhammad Nawaz has said that due to the increase in the price of yarn achieving the production targets has become very difficult.
The textile industry in Faisalabad is in grave danger. Prices have skyrocketed due to an artificial shortage in yarn delivery.
Power looms owners also signalled a halt to production due to higher consumption and lower profits.
He said that profit was being made by creating self-made shortage of yarn in the market. Sellers have also increased the price by thousands of rupees per 47 kg bales due to declining availability of yarn.
Power looms owners say they can’t make cheap cloth by buying such expensive yarn. With the current situation, the achievement of textile production targets seems to be in jeopardy.
Cotton Analyst Naseem Usman told that value-added textile sector has urged the government to accord genuine priority to the sector and immediately allow duty-free import of cotton yarn through presidential ordinance or act of Parliament failing which the government shall be responsible for the unrest in exporters which will lead to countrywide protest.
The value-added textile sector is continuously drawing the attention of the government through appeals towards unavailability and shortage of cotton yarn - which is basic raw material since last five months but to no avail.
Naseem told that 400 bales of Ghotki were sold at RS 12800 per maund.
Naseem also told that rate of cotton in Sindh was in between Rs 10,300 to Rs 11500 per maund. The rate of Phutti in Sindh is in between Rs 4500 to Rs 5100 per 40 kg.
The rate of cotton in Punjab is at Rs 12500 per maund. The rate of Phutti in Punjab is in between RS 4500 to Rs 6300 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 12000 per maund. The rate of Phutti of Dalbadin Balochistan is available at Rs 6300 to Rs 6400 per 40 Kg.
The Spot Rate remained unchanged at Rs 12200 per maund. The Polyester Fiber was available at Rs 215 per Kg.
Copyright Business Recorder, 2021
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