KARACHI: The prices of cotton in local market witnessed a significant decline of Rs 300 per maund under the influence of an extraordinary bearish trend in international cotton markets. The rate reached at the lowest level of Rs 11,900 per maund from Rs 12,200 per maund.
The cotton season has started with the partial sowing in lower Sindh. The sowing results till now are good. If the weather conditions remain favourable, it’s hoped that there will be good sowing in both Punjab and Sindh. The temperature is 40 degrees in some areas which can affect the cotton crop.
Karachi Cotton Brokers Forum chairman Naseem Usman was of the view that dishonesty is on the rise in the cotton business and both ginners and millers were equally responsible for the deterioration in the business. He told that both ginners and millers should stop ditching each other if they want stability and boom in the cotton business.
He further told that some brokers were also equally responsible for destroying this business. Naseem said initiatives taken by Pakistan Cotton Ginners Association chairman Dr Jasu Male, Major Kashif, Ahsan Ul Haq and Mudassir were very good.
Naseem Usman told that for the last two weeks we have been pointing out that there is an external conspiracy against Pakistan’s industrial, agricultural and commercial development.
It is now clear that the IMF is increasing its control over Pakistan’s economy. According to economists, government’s plan of giving extraordinary powers to SBP will be detrimental to country’s economy. It can be said that Pakistan’s economy is being hit hard.
Naseem Usman told that escalation of economic conflict between China and the United States was one of the main reasons behind fluctuation in the international cotton markets.
Due to the increase in the rate of petroleum products, the rate of polyester fiber was also increased.
As per weekly export report of USDA, one of the main reasons for the sharp decline in exports compared to last week is that China is still not interested in importing cotton from the United States.
This is creating a crisis because increasing of four cent a day and decreasing of four cent a day, this fluctuation is very dangerous. There is no idea where the market can go. That is why the crisis in business is growing.
Under the influence of New York bearish trend prevails in the international cotton markets. Due to this, the cotton business is becoming difficult all over the world. At the moment, there is no such chance of an immediate boom in the market.
In the New York Cotton Market Rate of Promise (Waday Ka Bhao) for May reached from 84 US cents to 95 cents. At that time people thought that it will reach one dollar five cents but the rate after decreasing reached at 85 cent to 86 cent and at once reached at 78 cent but on the last day due to profit tacking closed at 80 cent for the month of May.
A small quantity of stock had left in the local cotton market with ginners while there is not so much buying. The market is neither bearish nor bullish but remained stable.
The decreasing rate of dollar in Pakistan is also reason of the slow down in cotton and yarn business. An unsettled conflict also exists between All Pakistan Textile Mills Association and Value added sector. The value added sector was demanding permission for the import of yarn. The government had reduced 5 percent sales tax but the issue of 5 percent customs duty was not resolved.
The decreasing rate of dollar also creating hurdles in exports. Local yarn is available but the value added sector is still complaining about not easy availability on reasonable price.
According to the sources in yarn market, bearish trend was witnessed in the rate of yarn of forty count and above, while the yarn market of twenty one count and thirty count was not as bearish as the forty count yarn.
The fine count yarn witnessed more bearish trend while the shipment companies massively increased the rate of containers.
The rate of cotton in Sindh is in between Rs 10,200 per maund to Rs 11,500 per maund. The rate of Phutti which is available in a very limited amount is in between Rs 5,000 to Rs 5,300 per 40 kg.
The rate of cotton in Punjab is in between Rs 10,500 per maund to Rs 11,500 per maund while the rate of cotton on lending basis is at Rs 12,000 per maund. Generally market was bearish.
Along with cotton, the prices of petroleum products are also declining, that’s why the world is going towards crisis like situation so any decision regarding future business plans should be taken after thorough deliberations.
The uncertainty was increasing in the business and it was affecting the business of cotton and textile.
Copyright Business Recorder, 2021