KARACHI: The sluggish trend remained continued in the local cotton market on Friday. Market sources told that trading volume remained very low because textile sector is not taking interest in buying of cotton amid increasing threats of lock down during the third wave of coronavirus.
Cotton Analyst Nassem Usman told Business Recorder that ICE cotton futures rose as much as 3 percent on Thursday to their highest in a week on concerns over lower supplies of the natural fibre crop and a lower dollar.
Cotton contracts for July rose 2.56 cents, or 2.93percent, to 89.89 cents per lb by 13:08 p.m. EDT (1708 GMT), their highest since April 29.
“This is a culmination of a real supply issue for the current crop, high committed sales and expectations that we’re not going to grow as much cotton as we need for next year,” as key grains are paying better, said Louis Barbera, partner and analyst at VLM Commodities Ltd.
Chicago corn extended a rally on Thursday to a fresh eight-year high as dry weather threatened harvest yields in major exporter Brazil and kept the focus on ebbing global supplies.
“A planting rain is what’s needed, we’re going to be looking towards the end of May as the crucial time,” but in key cotton-producing counties that could grow up to a million bales, “it’s not looking good,” Barbera said.
The US Department of Agriculture’s weekly export sales report showed net sales of 63,700 running bales for 2020/2021, down 17percent from the previous week and 56percent from the prior 4-week average. Analysts, including Barbera, have said that since they see US cotton stocks falling, the weekly export reports will not be a major near-term factor for the market.
Meanwhile, Ivory Coast’s cotton output for the 2021/22 season is projected to reach a record 580,000 tonnes, up 4percent from the previous season, the cotton ginners’ association said on Thursday.
The country’s cotton sector has been recovering for the past decade after years of political turmoil caused production to plummet. The world’s top cocoa-producing nation was among Africa’s leading cotton exporters before civil war broke out in 2002.
“We plan to sow about 460,000 hectares for the 2021/22 campaign for production of about 580,000 tonnes of seed cotton,” said Brou Kouakou, executive secretary of the association, adding that output from the 2020/21 season had been revised to 558,000 tonnes, from 520,000 tonnes previously.
Kouakou said that farmers were interested in cotton because the farmgate price has held steady at 300 CFA francs ($0.55) per kg.
Regional Committee for Cotton and Textiles, led by former President FPCCI and Chairman of the Businessmen Panel Mian Anjum Nisar, called on Muhammad Asim, in-charge of Monsanto and Bayer Crop Science Regulatory Science Team Pakistan at his Lahore office.
The difference in cotton production between Pakistan and India of Monsanto Technology and how the significant difference in the volume of cotton production between Pakistan and India came into effect in the meeting.
Pakistani cotton production has not been even a quarter of the Indian cotton. India using Monsanto technology increased its cotton production from 10 million bales to 40 million bales and Pakistan still has 5.6 million bales of cotton.
During the meeting, the committee was briefed on the details of Monsanto’s dealings with the Pakistani government in different periods since 2007 and said that their affairs in Pakistan could not move forward if the legal requirements were not met.
Muhammad Asim also briefed about the affairs of Snefa, a company set up by five major textile groups in Pakistan Chairman Anjum Nisar said that due to the decline in cotton production we are losing billions of Dollars in foreign exchange which is a tragedy.
He said he would try to take the matter further by talking to the government and Snefa. Federation of Pakistan Chamber of Commerce and Industry will make every effort to increase cotton production.
Meanwhile, All Pakistan Textile Mills Association (APTMA) has requested the government to review its decision of 10 holidays at Eid-ul-Fitr as such a decision will massively hit the country industry’s production and subsequently exports.
The industry is of the view that Covid-19 related restrictions should be announced and implemented separately whereas Eid holidays should not be more than four days i.e. from May 13 to May 17 instead of a long stretch of 10 days. This will practically shut down Pakistan’s business sector from May 8 to May 17, 2021.
According to APTMA’s patron–in-chief Gohar Ijaz, in Bangladesh, the textile industry that provides single-source economic growth in its rapidly developing socio-economic environment has announced only three holidays for Eid. He said the country is expected to face production loss of $ 850,000 per day during holidays.
Naseem also told that government should take initiative of growing cotton in the desert areas with the support of Chinese scientists under China Pakistan Economic Corridor.
According to final fortnightly report of Pakistan Cotton Ginners Association (PCGA) for the cotton season 2020-21 released to media on Monday, Punjab arrival figures stood at 3.5 million or 3,509,798 bales while Sindh contributed over 2.1 million or 2,136,169 bales. PCGA could not release fortnightly reports during Apr 2021 due to the pandemic and the final report released Monday does not carry last year’s statistics for the month of April. The PCGA report says, “Data was not collected last year on May 1, 2020 due to Covid-19”. Hence, final report does not show comparison of today’s statistics with last year’s data.
However, PCGA’s mid March 2021 report does indicate the shortfall then stood at 34.16 per cent compared to corresponding period i.e year 2020, when arrivals were recorded 8.57 million bales. Cotton production plunged new low this year prompting the governments to take initiatives to revive past production patterns and move forward to touch new highs. Vice President, Pakistan Central Cotton Committee (PCCC) Dr Muhammad Ali Talpur had said a few days ago that a proposal was under consideration by the govt to announce cotton support price to encourage farmers.
More Over, reports being received from the fields suggest that the measures so far taken by the Punjab government have failed to attract growers towards sowing cotton this year. The acreage and production of cotton in the province has been on the decline for the last many years.
An official of the provincial agriculture department said that reports of cotton sowing, which began on April 1, are not promising. The crop has been sown on 10-12 per cent less area compared with that of last year, he added.
Currently, the crop is mostly being sown in Bahawalpur, Multan, Lodhran, Bahawalnagar and Rahim Yar Khan districts, while Khanewal, Layyah, Sahiwal districts are lagging in this respect.
Punjab is to sow the crop on 1.6m hectares of land to produce 6.07m bales. The agriculture department has issued a schedule for sowing of registered cotton varieties and advised the growers to complete sowing of registered Bt cotton varieties between April 1 and May 31.
The Bt cotton varieties recommended by the department include IUB-13, MNH-886, BS-15, Niab-878, and FH-142. Growers have been advised to consult local experts if they plan to sow other registered Bt cotton varieties keeping in view the environment of their district to get better production.
They have also been advised to cover 10pc of their lands with non-Bt varieties so that attacking pests do not develop resistance against Bt varieties.
The spot rate remained unchanged at Rs 11300 per maund. The Polyester Fiber was available at Rs 200 per kg.
Copyright Business Recorder, 2021