KARACHI: The Spot Rate Committee of the Karachi Cotton Association on Monday has decreased the spot rate by Rs 200 per maund and closed it at Rs 11000 per maund.
The local cotton market remained sluggish on Monday. Market sources told that trading volume remained thin.
Cotton Analyst Naseem Usman said that cotton arrivals in ginning factories hit the three-decade lowest level of 5.6 million bales as the industry is concerned about prospects of textile production without sufficient raw material and no alternative arrangement by the government, traders said on Saturday.
Till April 1, a total of 70,200 bales were exported, while 5.49 million bales were sold to textile mills. Ginners have 85,070 bales in stocks, according to Pakistan Cotton Ginners Association.
Since no data was released by the Pakistan Cotton Ginners Association during this time last year due to the pandemic lockdown, there is no comparison. However, last fortnightly data showed a decline of 34 percent in the arrivals compared to last year.
Cotton Analyst Naseem Usman also said that production of 8.7 million bales was recorded last year. Current production was down by 3 million bales, which is the lowest production in last 30 years.
Industry is concerned about the consistent decline in cotton production in the country and indecisiveness of the government about the steps to meet the demand of local textile businesses as it first allowed cotton imports from India and later disapproved the decision on political issues.
Arrivals from Punjab have been recorded at 3.5 million bales, while Sindh contributed 2.1 million bales. Currently, only five mills are in partially operation in Punjab. No mill is operating in Sindh.
Usman said partial cotton sowing for the new season has started in Sindh while it is likely to begin in Punjab from April 15.
Mills remained cautious of buying during the last week, which affected the trade volume and rates decreased Rs500 to Rs600 per maund in the local market. In the international market, prices also were down 3 to 4 cents per pound.
Cotton spot rate in the local market decreased Rs 1,100 per maund in two weeks, which was the highest decline in the history of the Karachi Cotton Association, a trader said.
Besides, depreciation in the dollar value could also affect prices in the local market. There were further speculations related to dollar prices and mills did not want to take risk of huge buying. A decline in yarn prices was also a reason behind decline of cotton rates in the local market.
All Pakistan Value-added Textile Association (APVTA) has demanded complete ban on the export of cotton and cotton yarn and warned that they would be forced to set up a protest camp at Clock Tower on Thursday if positive decision was not made by the Federal Cabinet.
Addressing a joint press conference in Pakistan Hosiery Manufactures and Exporters Association (PHMA) Mian Farrukh Iqbal Senior Vice Chairman (North Zone) PHMA said that some circles were maligning value added sector that they have pushed Kashmir cause under the carpet which is not true.
He said that exporters and industrialists are patriotic Pakistanis and they could not even think of violating national security issues at the cost of their businesses. He said that they fully endorse the Kashmir policy of present government but they have to take care of millions of workers who are the backbone of national economy. He said that it was government duty to fully analyze all aspects of trade with India in Economic Coordination Committee before making its decision public.
He told that some sectors are exploiting the situation and exporting yarn despite of acute shortage of this raw material in the country. He told that during the month of February, yarn of 132 million dollar was exported which was 23 percent in excess to the yarn exported during the same period of the last year. He said that if export of cotton yarn was not stopped, the export of value added sector will dip down to the minimum. It will also have a fallout impact on factories which have already started closing down.
He said that the government should make final decision till Tuesday or Wednesday to prohibit export of cotton yarn as further delay will be disastrous for the country.
The Pakistan Cotton Ginners Association (PCGA) strongly opposed cotton imports from India, maintaining that the move would discourage local growers from sowing this cash crop.
Growers, ginners, spinners and cotton brokers are actively supporting the government’s decision of not allowing cotton imports from India despite the Economic Coordination Committee approval.
PCGA Chairman Dr Jesu Mal said that if Indian cotton imports are allowed, growers will not go for sowing of cotton for this season. Cotton sowing has already begun in Sindh and will start soon in Punjab. “Due to no research on cotton seeds, poor pesticides and high cost of fertilisers, cotton yield fell to nine maund per acre during the season ended with just 5.5 million bales — almost one third of the production we achieved with 14.8m bales a few years ago,” he said.
The recent yields are around 16 maunds per acre which has been sharply declining as the government has largely neglected the most important cash crop which helped earn over 60 per cent export proceeds, Mr Mal said.
Commenting on the cost of cotton production, he said in India it was Rs20,000 (equal to Pak rupee) per acre compared to Rs50,000 in Pakistan. Furthermore, the Indian government buys cotton if the price falls below minimum rate, he said.
“The Indian government is offering cotton from its stocks. It is not in the hands of farmers or ginners,” Mr Mal said while demanding minimum support price on the lines of wheat and sugarcane for cotton.
“We are not supported by the government because 85pc farmers have just 12 acres of land. Small farmers have no lobby in Islamabad to get protection,” he said.
Chairman of National Business Group and President Pakistan Businessmen and Intellectuals Forum (PBIF), Mian Zahid Hussain has said the cabinet’s decision to turndown Economic Coordination Committee’s move to allow the import of cotton and yarn from India through land and sea routes has created uncertainty in the largest export earning sector of textiles.
The decision has attracted criticism from industrial sector and raised questions about the future of textile industry, he said.
He said that the suggestion of Commerce Advisor Abdul Razzaq Dawood and textile sector to allow the import of cotton and yarn from India was according to the ground realities and national interests.
Meanwhile, the Agricultural Committee headed by Punjab Governor Chaudhry Mohammad Sarwar has recommended raising the cotton support price to Rs 5,000 per maund and providing direct subsidy to cotton growers.
Chairman CPEC Authority Asim Saleem Bajwa, Provincial Minister for Agriculture Syed Hasnain Jahanian Gardezi and others attended the meeting of the committee held at Governor House.
The meeting chaired by Governor Punjab Chaudhry Mohammad Sarwar discussed the problems faced by cotton growers and their solution. Federal Minister for National Food and Research Syed Fakhr Imam joined the meeting via video link.
Addressing the meeting, the governor said that an effective policy and integrated strategy is needed to increase cotton production. Welcoming the decision of the federal government to not import cotton from India, he said to encourage cotton growers, subsidies will be given directly to farmers in a phase manner and at the same time the federal and provincial governments will ensure strict action against those responsible for selling substandard pesticides to cotton growers.
Chairman CPEC Authority Asim Saleem Bajwa said that China is assisting in research and machinery to increase cotton production. Cotton and textiles account for eight percent of Pakistan’s economy and we must all work together to strengthen Pakistan’s economy, he added.
Federal Minister for National Food and Research Syed Fakhr Imam said that the previous governments neglected the cotton growers but the present government under the leadership of Prime Minister Imran Khan is facilitating them. The federal government will ensure the implementation of steps in accordance with the recommendations put forward by the committee, he added.
Cotton Analyst Naseem Usman told that according to the experts over the past three months, at least 15 national and regional level trade bodies have lobbied for yarn import, while APTMA is almost alone in its opposition. Events over last week may show that the interests of a minority group have carried the day. But should the numerical strength of trade bodies and their members determine national level trade policy?
Naseem also told that rate of cotton in Sindh was in between Rs 10,200 to Rs 10400 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 Rs 10500 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 Committee of the Karachi Cotton Association on Monday has decreased the spot rate by Rs 200 per maund and closed it at Rs 11000 per maund. The rate of Polyester Fiber was decreased by RS 5 per Kg and was available at RS 215 per Kg.
Copyright Business Recorder, 2021