KARACHI: The local market remained sluggish on Friday. Market sources told that trading volume remained thin.
Market Sources told that the rate of cotton in Sindh is in between Rs 13000 to Rs 13300 per maund. The rate of cotton in Punjab is ion between Rs 13500 to Rs 14000 per maund.
The rate of new crop of Phutti in Sindh was in between Rs 5700 to Rs 5900 per 40 kg. The rate of Phutti in Punjab is in between Rs 6200 to Rs 6400 per 40 kg. The rate of Banola in Sindh is in between Rs 1800 to Rs 2000 per maund. The rate of Banola in Punjab is in between Rs 2200 to Rs 2300 per maund.
Cotton Analyst Naseem Usman told Business Recorder that Pakistan Cotton Ginners Association has written a letter to Cotton Commissioner for imposing a ban on shifting of Phutti from Sindh to other provinces. The Cotton ginners had stopped the buying of Phutti.
PCGA said that cotton production in Sindh was witnessing a decline for the last three years. Due to the shortage of Phutti 50 percent factories were facing difficulties in running their operations.
The textile sector has made a fervent appeal to India’s Union Finance Minister Nirmala Sitharaman to withdraw the cotton import duty, which is severely hurting the global competitiveness of the Indian textile and clothing Industry.
“Both the basic customs duty and agriculture infrastructure development cess levied on cotton should be withdrawn to create a level playing field on the raw material front for the Indian textile and clothing industry.
The import duty on raw cotton would erode the competitiveness of the value-added segments that has a business size of around Rs 50,000 crores in exports and Rs 25,000 crores in the domestic market. These segments provide jobs to around 12 lakh people,” said Ashwin Chandran, chairman, The Southern India Mills Association (SIMA) in a statement.
The government might receive around Rs 360 crores per annum as additional revenue on account of the import duty on cotton, but will in turn imperil annual GST revenues of around Rs 1,800 crores.
“More importantly, the import duty will not benefit the Indian cotton farmers owing to the negligible volume of imports and the non-availability of such specialty cottons in India at the moment. Since the Indian textiles and clothing exporters are predominantly MSMEs, it is practically impossible for them to avail duty exemption under the Advance Authorization Scheme,” he added.
None of the countries in the textile trade, including major competitors like China, Bangladesh, Pakistan, Vietnam and Sri Lanka, levy import duty on cotton. Hence, steps should be taken to withdraw the import duty on a war footing to enable the ailing Indian cotton textile industry
ICE cotton futures fell more than 2 percent on Thursday as the dollar jumped to a multi-month peak, with the natural fibre also tracking weakness in grains and broader markets.
Cotton contracts for December fell 1.77 cent, or 2.1percent, at 84.18 cents per lb, by 12:21 p.m. EDT (1621 GMT). “The market has been showing a little bit of weakness this week. Some of this seems to be coming from the outside market forces, in particular, the dollar index is trading quite a bit higher and grains are down as well,” said Bailey Thomen, cotton risk management associate at StoneX Group.
The dollar rose to a two-month peak, a day after the US Federal Reserve signalled it would raise interest rates in 2023.
“The fact that the US Federal Reserve acknowledged some of the increase in the risk of inflation and their need to raise interest rates sooner than expected has added a little bit of fear to the markets,” Thomen added.
Chicago corn futures slid more than 2percent and soybeans dropped to a six-week low, while global equity markets headed for their biggest fall in weeks. Cotton declined, despite decent export sales figures from the US Department of Agriculture (USDA). Net sales of 111,300 running bales (RB) for 2020/2021 were up 3percent from the previous week, while exports of 303,800 RB were up 18percent.
Focus remains on the June 30th acreage report for clarity on the US production estimates. The dollar strength and uncertainty ahead of the acreage report are weighing on cotton, Commerzbank said in a note. “Despite a 16percent rise in production in the US, another good crop in India and increases in Brazil and Australia, the USDA expects the market to be in deficit in 2021/22,” as demand remains robust
The Spot Rate remained unchanged at Rs 12300 per maund. The rate of Polyester Fibre was increased by Rs 3 per kg and was available at Rs 205 per kg.
Copyright Business Recorder, 2021
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