KARACHI: The local cotton market on Tuesday remained sluggish on Tuesday. Market sources said that trading volume remained low.
Cotton Analyst Naseem Usman told that ICE cotton futures edged lower in choppy trading on Monday, pressured by a firmer dollar, while expectations for a reduction to forecasts for planted acreage in a federal report due later this week put a floor under prices.
Cotton contracts for May were down 0.12 cent or 0.2% at 80.26 cents per lb by 10:59 a.m. EDT. It traded within a range of 79.93 and 80.85 cents a lb.
The dollar hit a more than four-month high, making cotton more expensive for buyers holding other currencies.
The US Department of Agriculture’s planting intentions report is due at 1600 GMT on Wednesday. A Reuters poll forecasts US cotton acreage at 11.905 million acres for the 2021/22 marketing year.
“The trade is looking for a number under 12 million acres because of the strong competition from soybeans, corn, groundnuts and grain sorghum,” said Keith Brown, principal at cotton brokers Keith Brown and Co in Georgia.
In a potential escalation of tensions with top cotton buyer China, the United States on Saturday condemned China’s sanctions against two American religious-rights officials in a dispute over Beijing’s treatment of Uighur Muslims.
Last week, the China branch of the cotton trade body Better Cotton Initiative (BCI) said it had not found signs of forced labour related to cotton production in Xinjiang.
The Economic Coordination Committee (ECC) of the Cabinet is to allow import of cotton and yarn through land route (including India) aimed at ensuring provision of raw material to the value-added sector at cheaper rates.
On Monday, PM’s Advisor on Commerce and Investment Abdul Razak Dawood got approval from Prime Minister Imran Khan to import cotton and yarn through land route (including India) to meet domestic demand and bring down the prices in domestic market.
According to Dawood, a meeting was held with the Prime Minister to discuss escalating prices of cotton yarn in the country, adding that the prime minister was sympathetic towards the value-added sector and advised that in order to ease the pressure on yarn and keep momentum of value-added exports imports from India would be necessary.
“All steps will be taken through cross-border imports of cotton including by land. A summary will be presented at the next ECC meeting to ensure availability of cotton and yarn in the coming months,” Dawood added.
Last week, Razak Dawood told media that he had not talked to the prime minister on this issue as he is in isolation after testing positive for Covid-19, however, he sincerely hopes that trade with India will start again, adding that trade should be separated from politics.
The Ministry of Textile Industry on Monday sought permission from the Economic Coordination Committee of the cabinet to lift ban on import of cotton and cotton yarn from India in a bid bridge raw material shortfall for the value-added textile sector, Dawn has learnt from official sources.
The import of these raw materials will lead to partial revival of trade relations with India since August 2019 when Pakistan formally downgraded its trade relations. The low yield cotton bales in the country has paved the way for import from India.
“We already submitted the summary to the ECC more than a week ago to lift the ban,” an official said, adding the decision of the coordination committee will then be placed before the federal cabinet for formal approval.
The government’s decision to consider lifting of ban from India came as a big relief for the value-added textile sector which seeks access to cheap raw materials.
Currently, cotton and yarn imports are allowed from all countries except India.
Prime Minister Imran Khan, as incharge of commerce and textile ministry, has already approved the summary to be placed before the ECC.
On Aug 9, 2019 Pakistan downgraded trade relations with India in reaction to the latter’s decision to revoke Article 370 of its constitution that granted occupied Kashmir a special status. Bilateral trade remained suspended since then.
Meanwhile All Pakistan Textiles Mills Association has appealed to the Prime Minister of Pakistan to provide regionally competitive energy tariff.
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 4800 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 11500 per maund. The Polyester Fiber was available at Rs 220 per Kg.
Copyright Business Recorder, 2021