Cotton market stays calm and easy

KARACHI: The local cotton market on Saturday was easy. Trading volume was also satisfactory.

Cotton Analyst Naseem Usman told that the rate of cotton in Sindh is in between Rs 13000 to Rs 13100 per maund. The rate of cotton in Punjab is in between Rs 13600 to Rs 13700 per maund.

The rate of new crop of Phutti in Sindh was in between Rs 5600 to Rs 5900 per 40 Kg. The rate of Phutti in Punjab is in between Rs 5700 to Rs 6100 per 40 Kg. The rate of Banola in Sindh is in between Rs 1800 to Rs 1900 per maund. The rate of Banola in Punjab is in between Rs 1900 to Rs 2000 per maund.

Cotton Analyst Naseem Usman told Business Recorder that with increased demand from the textile industry, global cotton stocks fell to a three-year low. Although cotton production is projected to increase by 5% in 2021, the demand will outpace supply which will raise prices further. In the medium term, the main driver of growth in the cotton market will be the demand for textiles from the growing global population.

According to a recent report by the World Bank, the average price for raw cotton in the first quarter of 2021 was $1.64 per kg, which is 3% higher than the average price in 2020. In the fourth quarter of 2021, prices are projected to rise to $1.72 per kg.

Despite the positive dynamics, cotton production in 2021 will not return to the record levels of 2019. High cotton yields are projected in the U.S. (+523K tonnes), Brazil (+436K tonnes) and Australia (+239K tonnes), Pakistan (+174K tonnes) due to favorable weather conditions and the increasing harvested area. China, on the other hand, will lower cotton production and give way to India as the main producer with a 24% share of the world total.

The highest growth rates for the cotton industry and demand for cotton are expected in Pakistan, India, Bangladesh, Vietnam, Turkey and China. The first four countries mentioned are becoming center points for the global textile industry due to cheap labor. In China and Turkey, the populations’ rising incomes will make production less competitive. It is assumed that domestic production will not be able to fully meet the demand of the cotton industry in China, and the country will have to increase its imports.

Different Industrial Associations of Karachi as appealed to the Prime Minister to restore the gas supply to the industry of Karachi as the production of entire industry has come to halt due to closure of gas supply and zero gas pressure.

Prime Minister Imran Khan was given a briefing on textile sector in context of its improvement as a result of the steps taken by the government. The meeting was attended by PM’s Adviser on Trade and Investment Abdul Razzak Dawood, Special Assistant on Political Affairs Malik Amir Dogar, and the Members of National Assembly Asim Nazir, Raza Nasrullah Ghuman, Khurram Shehzad and industrialist Shahid Nazir.

MNA Asim Nazir briefed the Prime Minister on issues related to the textile sector and its role in exports. He also presented to the prime minister suggestions for further improvement and development of textile sector. The meeting also discussed political situation in the country, relief to the people in the budget and measures to facilitate and develop industries.

The Spot Rate remained unchanged at Rs 12600 per maund. The Polyester Fiber was available at Rs 207 per kg.