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KARACHI: The local cotton market remained bearish on Thursday. Market Sources told that trading volume remained thin. Market Sources told that the rate of cotton is in between Rs 13000 to Rs 13200 per maund.

The rate of new crop of Phutti was in between Rs 5700 to Rs 6000 per 40 kg. The rate of Banola is in between Rs 2000 to Rs 2200 per maund.

The Value-added Textile Exports Association on Wednesday demanded of the government to restore zero rating - no payment no refund system–and continue with Duty Drawback of Taxes (DDT) & Technology Upgradation Fund (TUF) scheme and duty-free import of cotton yarn in the forthcoming budget for 2021-22.

Addressing a joint press conference, the textile sector representatives also demanded reduction of withholding tax rate to 0.5 percent, suspension of EDF surcharge, reduce and fix tariffs of electricity, gas & RLNG to support the country’s largest exporting sector.

They were of the view that the exports must remain top priority of the government as it is the lifeline of economy deserves government’s continuous support. If the government assures to extend the deserving support to the value-added textile export sector it has the capacity to achieve the milestone and pledges to enhance its exports by 30 percent and will reach at $20 billion in FY2021-22 and will increase by 25 percent every year onward 2022-2023 resulting to surplus trade of Pakistan, more foreign exchange earnings & additional employment.

Zubair Motiwala Chairman, Council of All Pakistan Textile Mills Associations, Jawed Bilwani Chairman, Pakistan Apparel Forum, Tariq Munir Chairman Pakistan Hosiery Manufacturers & Exporters Association, Rafiq Godil Chairman Pakistan Knitwear and Sweater Exporters Association, Feroze Alam Lari Chairman Towel Manufacturers Association of Pakistan, Abdus Samad Chairman Pakistan Cloth Merchants Association, Zulfiqar Chaudhry Chairman All Pakistan Textile Processing Mills Association, Shaikh Shafiq Former Chairman Pakistan Readymade Garment Manufacturers & Exporter Association, Khawaja M Usman Former Chairman Pakistan Cotton Fashion Apparels Manufacturers & Exporters Association, Amin Allana Chairman All Pakistan Bedsheets & Upholstery Manufacturers Association, Yusuf Yaqoob Chairman Pakistan Weaving Manufacturers Association participated in the Joint Press Conference held at PHMA.

The Chairmen of the Value Added Textile Exports Associations apprised that they have submitted Budget Proposals to the Federal Government wherein the top demand is to restore Zero Rating on GST i.e. “No Payment No Refund Regime” through revival of SRO 1125 in letter & spirit as SME exporters have been closed down and decreased by 30 percent as compared to last year due to imposition of 17 percent which blocked exporters precious liquidity.

They were of the view that the textile exporters are optimistic and hopeful that the federal government in the Federal Budget 2021-22 will seriously consider and accept their demands, proposals and recommendations in the larger interest of the sector.

Industry representatives also highlighted that despite COVID19, the textile exports have increased by 17.35 percent as compared to last year and will touch $ 15.50 billion end of this fiscal year owing to incumbent government’s policies, payments of Drawback of Local Taxes & Levies (DLTL)/Duty Drawback of Taxes (DDT), special/competitive tariff and uninterrupted supply of utilities.

Cotton Analyst Naseem Usman told that cotton sowing in the country witnessed encouraging trend as crop cultivation has been completed over 1.83 million hectares as against the set target of 2.1 million hectares for crop season 2021-22 in order to produce about 10.50 million bales.

In Punjab, so far sowing targets has been achieved by 97 per cent as cotton cultivation was completed over 1.30 million hectares against the set target of 1.35 million hectares, said Cotton Commissioner in the Ministry of National Food Security and Research Dr Khalid Abdullah.

Talking to media he said Sindh province completed its task by 72 percent and crop has been sown over 0.46 million hectares as against the set target of 0.64 million hectares, adding crop cultivation in some divisions is completed and in some areas it is still in progress that will add more areas under crop production.

The other provinces which contribute in total output including Balochistan, Khyber Pakhtunkhwa also completed their assigned task and crop is cultivated over 0.07 million hectares and 0.0022 million hectares respectively, he added.

Dr Abdullah was of the view that sowing target will be met due to incentives and measures introduced by the federal government under ‘Kharif Package’ to promote seasonal crops, particularly to revive cotton, which he said contribute significantly in the gross domestic product growth.

The federal government has transferred the allocated funds to provincial governments under Kharif Package for ensuring availability of major inputs like certified seeds, fertilizers and pesticides, he said adding Sindh has also entered in package and allocated funds are transferred too.

He further informed that under Kharif Package an amount of Rs 5.096 billion is transferred to Punjab province, adding out of the total amount Rs 4.867 billion will be spent on the provision of subsidised fertilizers and Rs 114 million for supply of certified seeds.

In order to overcome the white fly issues in cotton crop, Rs 114 million will be spent on the eradication of pest during current season that will help boost local output.

Meanwhile, he said an amount of Rs 126.870 million is transferred for the Khyber Pakhtunkhwa government and Rs 659.770 million to Balochistan for the purchase of agriculture inputs to enhance per-acre output of major and minor crops, particularly cotton.

Atul Ganatra, president, CAI said that the Centre has allocated Rs 440 crore towards “Cotton Quality Improvement Mission” to improve quality and yields. Although India has the highest area under cotton, the yield is among the lowest in the world, he said.

Government procurement plays a big role in ensuring farmers stick to cotton, he said. With cotton commanding prices as high as Rs 7,500 per quintal, the Cotton Corporation of India (CCI) and the Cotton Association of India (CAI) have come together to educate farmers to increase cultivation across the country and also raise yields. Normally, around 110 lakh-120 hectare area comes under cotton cultivation in India.

Atul Ganatra, president, CAI said that the Centre has allocated Rs 440 crore towards “Cotton Quality Improvement Mission” to improve quality and yields. Although India has the highest area under cotton, the yield is among the lowest in the world, he said.

He was addressing a virtual meeting of stakeholders to improve cotton yields across the country. The ‘Cotton Mission’ is currently under discussion and meetings have been held by the stakeholders with the Textile Committee of India.

The Textile Committee’s office has asked for a list of cotton ginners across the country so that they can become part of the project. The minimum support price (MSP)of cotton in the outgoing season was Rs 5,825 per quintal. During the cotton season of 2020-21, CCI had procured 92 lakh bales under MSP operations and nearly 1 crore bales in the season of 2019-20.

Arvind Pant of the Gujarat Cotton Association said that the area under cotton in Gujarat is likely to go up by 10-12 percent despite oilseeds commanding high price. Government procurement plays a big role in ensuring farmers stick to cotton, he said.

Mahesh Sarda of the North India Cotton Association pointed out that price is the biggest deciding factor for the farmer who would look for better returns. The price realisations of cotton and groundnut need to be compared, he said, adding that sowing in some parts of Rajasthan and Haryana has been around 5percent less this kharif.

Pradeep Jain, president, Khandesh Cotton Ginners/Pressers Association said that ginners in Maharashtra have been working on improving cotton yields for last 8-10 years and a booklet of best practices has also been distributed to farmers through the ‘Ginner at Your Doorstep’ initiative. The response has not been very positive he said.

Ashok Patil, a farmer from Jalgaon said that he managed to get 28 quintal per acre yield from his farm and offered his services to both the bodies. In Maharashtra, it is expected that over 40 lakh hectares will record sowing of cotton and soybean.

Maharashtra accounts for over 30percent of the cotton grown in the country but state farmers fail to compete with their counterparts in Rajasthan, Gujarat or Telangana, both in per hectare yield and produce.

Jayesh Mahajan, senior official of the Maharashtra Cooperative Cotton Growers Federation had earlier pointed out how the per hectare yield of cotton in Maharashtra is between 8-9 quintals as compared to the 14-15 quintals/hectare yields nationally. Worldwide, cotton growers see much higher yields of 24-25 quintal/hectare, with US farmers reporting 55 quintal/hectares.

ICE cotton futures rose more than 1percent on Tuesday boosted by gains in the grain markets and some adverse weather conditions in growing regions, as market participants looked ahead to a federal supply and demand report this week.

Cotton contracts for December rose 1.18 cent or 1.4percent, at 86.44 cents per lb by 12:10 pm EDT (1610 GMT). It traded within a range of 85.18 and 86.65 cents a lb.

“We’re seeing a little bit of strength across the commodity sector; grains are trading a little bit higher so that’s adding a bit of support,” Bailey Thomen, cotton risk management associate at StoneX Group said, adding rollovers from the July to December contract were also helping.

Chicago corn and soybean futures rose 1percent after a US government report pegged the condition of domestic crops below market expectations, sparking concerns over global supply, while wheat also firmed.

While 46percent of the cotton crop was in good-to-excellent condition by the week ended June 6, compared with 43percent this time last year, about 71percent of the crop was planted versus the five-year average of 78percent, the US Department of Agriculture’s (USDA) weekly crop progress report showed.

On the weather front, “it’s been a little bit dry in Georgia as well in the southeast, so they could probably use a bit more rain as we progress through the season here, but it has definitely improved over the last month,” Thomen said.

Investors now await the USDA’s monthly supply and demand report due on Thursday. Total futures market volume fell by 19,544 to 18,549 lots. Data showed total open interest fell 2,171 to 229,470 contracts in the previous session.

Cotton Cooperation of India (CCI) has increased the price of per cotton candy by Rs 500 to Rs 600. The Spot Rate remained unchanged at Rs 12300 per maund. The rate of Polyester Fiber was increased by Rs 2 per kg and was available at Rs 202 per kg.

Copyright Business Recorder, 2021