Steady trend on cotton market

KARACHI: The local cotton market on Tuesday remained s bearish and volume was satisfactory.

Cotton Analyst Naseem Usman told Business Recorder 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 5700 to Rs 5900 per 40 kg. The rate of Phutti in Punjab is in between Rs 5500 to Rs 6300 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 2100 per maund. The rate of cotton in Balochistan is Rs 13300 per maund. The rate of Phutti in Balochistan is in between Rs 6000 to RS 6200 per maund.

600 bales of Sanghar were sold at Rs 13000 to Rs 13100 per maund, 400 bales of Shahdad Pur were sold at Rs 13000 to Rs 13100 per maund, 400 bales of Tando Adam were sold at Rs 13000 per maund, 1600 bales of Chichawatni were sold in between Rs 13500 to Rs 13900 per maund, 400 bales of Hasil Pur were sold at Rs 13500 to Rs 13700 per maund and 100 bales of Mongi Bangla were sold at Rs 13700 per maund.

Advisor to the Prime Minister on Trade, Textiles and Investment Abdul Razak Dawood, while addressing a meeting at the office of Pakistan Hosiery Manufacturers and Exporters Association (PHMEA), said that DLTL for textile sector would be continue in future to further increase the export of value-added textiles.

He said the biggest problem of exporters was zero rate of sales tax. “I will talk to the prime minister and the finance minister myself”, he added. He said that for the textile sector, electricity tariff rate will be at 9.00 cent per kwh while gas will be delivered at 6.5 dollars per MMBTU.

Earlier, while delivering the welcome address, Senior Vice Chairman Mian Farrukh Iqbal gave a brief introduction of PHMA and said that PHMA was the largest and selected exporter of knitted garments. “It has more than 2,000 member companies across Pakistan and has the distinction of providing the most employment opportunities in the country,” he added.

He said that PHMA members earned more than 3.5 billion annually in foreign exchange while the association had offices in Faisalabad, Karachi, Lahore and Sialkot. “Our association has increased exports by 33 percent in 11 months, while our growth in May is more than 62 percent,” he said.

He said that “with the efforts of PM Imran Khan and his team which you are leading, Pakistan has achieved the target of 25.3 billion for the first time in the history of the country.”

He said that after closure of factories due to Covid last year, exporters could not increase their exports by more than 10 percent so the condition of incremental for DLTL should be removed and DLTL should be given at flat rate. He said that while continuing this policy in future also, the rate of DLTL should be increased and DLTL should be given once at flat rate.

Speaking on raw material, he said the export of yarn should be banned till domestic needs were met. Former chairman, Central PHMA, Dr Khurram Tariq, while giving a presentation on textile policy at the meeting, said that textile policy had not been issued by the government yet, adding “so how can we confirm the export order with our buyers, because electricity and gas rates have not been confirmed and no DLTL notification has been issued.”

He said “if we want to increase exports on a permanent basis, we have to increase the production of domestic cotton and also focus on structural issues. Even today, the prices of our yarns in the international market are 10-15 percent higher. It is unfortunate for our country that traders are earning more than manufacturers,” he said. He added that freight charges had also risen from 2,000 dollars to 7,000 dollars.

Pakistan’s export to and from USA remained steady during the peak of the COVID-19 pandemic despite the fact that Pakistan is the third largest exporter to USA for home textile.

It was told to the participants of an investment webinar chaired by Governor Sindh Imran Ismail at the Governor’s House on Monday. The webinar was organized in collaboration with the Consulate General of Pakistan in Los Angeles USA, said a statement.

Director General, Trade Development Authority of Pakistan (TDAP), DG, Board of Investment, Joint Director (Policy & Sector Growth), Ministry of Information Technology and Telecommunications, Director Finance & Projects, Pakistan Software Export Board, CEO, SEZ, Investment Department of Sindh; Senior Manager (I.T), Information Technology Department of Sindh; Deputy Director, Industries, Industries and Commerce Department of Sindh; Chairman, ABAD, Karachi; Senior Representatives of APTMA, Karachi; and FPCCI, Karachi; and Chairman, Pakistan Software House Association, Islamabad attended the event.

Likewise, Consul General of Pakistan at Los Angeles, Abdul Jabbar Memon and overseas Pakistani investors in USA, took part in the webinar through video link. Abdul Jabbar Memon in his opening remarks said that the webinar will provide an opportunity to coordinate directly with the overseas Pakistani Investors in USA.

Pakistan’s export to and from USA have also remained steady during the peak of the COVID-19 pandemic. “In 2019 and 2020, the total exports remained over US$ 3.9 Billion and imports US$ 2.9 Billion. The total bilateral trade was recorded at US$ 6.8 Billion,” it was further informed.

The Governor of Sindh observed that Pakistan’s economy remains resilient despite the impact of COVID-19. He emphasized that Pakistan is an ideal destination for investment from the viewpoint of its geopolitical importance, abundant natural and human resources, as well as strong policy and structural reforms.

He also highlighted the launching of green bonds as well as WAPDA bonds by the government, and said that such initiatives were appreciated and acknowledged widely by the international investors and oversees Pakistanis

Meanwhile, the police in Bangladesh have primarily identified 530 factories, mostly readymade garment and textile units, which may face labour unrest over non-payment of wages and festival allowances before Eid-ul-Azha to be celebrated on July 21. Eid-ul-Azha is one of the biggest religious festivals of the Muslims. The Industrial Police has prepared the list of 530 factories, including 372 RMG and textile units.

Of the factories, 276 are members of the Bangladesh Garment Manufacturers and Exporters Association, 63 members of the Bangladesh Knitwear Manufacturers and Exporters Association, 33 registered with the Bangladesh Textile Mills Association, 19 industrial units operating under the Bangladesh Export Processing Zones Authority and 139 non-RMG factories.

Moreover, The US 2021/22 cotton projections show higher production, exports, and ending stocks compared with last month. While the June 30 Acreage report shows 300,000 fewer planted acres for U.S. cotton than NASS’s previous survey, a rainfall-driven reduction in projected Texas abandonment means U.S. harvested area is projected 9 percent higher.

While 2021/22 production is 800,000 bales higher, consumption is unchanged, and exports and ending stocks are each projected 400,000 bales higher. The upland cotton farm price for 2021/22 is unchanged, at 75 cents per pound, while the 2020/21 price is reduced one half cent to 66.5 cents per pound.

World 2021/22 ending stocks of cotton are projected 1.6 million bales lower than in June as largely offsetting changes in production and consumption do little to offset lower estimated beginning stocks. Beginning stocks are 1.5 million bales lower, largely due to reduced 2020/21 Brazilian and Indian production and higher Indian consumption.

World production in 2021/22 is projected about 500,000 bales higher this month as a larger U.S. crop more than offsets a 300,000-bale decline for Pakistan. Consumption is slightly more than 600,000 bales higher largely due to an increase for India.

World trade is projected 670,000 bales lower, with China’s imports 1 million lower and Brazil’s exports 1.1 million bales lower.

Cotton Futures Gain On Monday. Afternoon, cotton trading pushed prices higher. Futures were up 38 to 48 points on the day, after trading with less than 10 point gains through midday. Cotton’s old crop cash price in the WASDE report was cut by half a penny to 66.5 cents/lb. New crop was unch at 75.

The weekly Crop Progress report showed 55% of the cotton crop was squaring as of 7/11 which is down from the 61% average pace. NASS saw 16% of cotton setting bolls, which compares to the 5-yr average of 20% by that week.

The July WASDE report showed USDA made no changes for old crop, but for new crop, production was increased by 800k bales. Planted area was trimmed reflecting the NASS survey, but harvested acreage was raised to 10.5m acres offsetting a 33 lb/acre yield cut. USDA added 400k bales to exports, now seen at 15.2m bales for 21/22, which only moved carryout 400k bales higher to 3.3 million.

The Spot Rate remained unchanged at Rs 13100 per maund. The rate of Polyester Fibre increased by Rs 3 per kg and was available at Rs 213 per kg.

Copyright Business Recorder, 2021