KARACHI: In the local cotton market during the last week the rate of cotton from Sindh dropped by Rs 400 to Rs 500 per maund while the rate of cotton in Punjab significantly decreased by Rs 600 to Rs 700 per maund. The reason behind this extraordinary decrease in the rate of cotton is rains.
The textile and spinning mills had stopped buying while many ginners had stopped buying of rain effected cotton due to which the ginning factories had partially stopped their operations. Some ginners were demanding high rates of the Phutti which they had in their stock prior to rains.
There was uncertainty among ginners and traders of Phutti due to significant decrease in the rate of cotton because ginners had sold their stock of cotton on high rates as well as traders sold Phutti on high rates. The trading volume also decreased.
On the other hand truck and trallers’ fares have also gone up due to the transportation of sacrificial animals on Eidul Azha. According to market sources cotton trade could resume after Eid holidays.
The market sources also said local cotton prices are unlikely to fall further due to rising cotton prices in international cotton markets.
On the other hand, due to a significant decline in cotton production, the price of cotton is not likely to decline further.
The threat of fourth wave of Covid-19, there is a risk of another lockdown. The demand and supply of local cloth and yarn is stable.
The rate of cotton in Sindh after decreasing by Rs 400 to Rs 500 per maund from Rs 13000 to Rs 13200 per maund is in between Rs 12600 to Rs 12800 per maund. The rate of Phutti after decreasing Rs 300 to Rs 400 per 40 kg is in between Rs 5200 to Rs 5700 per 40 kg. The rate of Banola is in between Rs 1700 to Rs 1800 per maund.
The rate of cotton in Punjab after decreasing by Rs 600 to Rs 700 per maund is in between Rs 13000 to Rs 13200 per maund while the rate of Phutti is in between Rs 5200 to Rs 6100 per 40 Kg. The rate of Banola is in between Rs 1900 to Rs 2000 per maund. In Balochistan three ginning factories are operational. The rate of cotton in Balochistan is in between Rs 12900 to Rs 13000 per maund while the rate of Phutti is in between Rs 5700 to Rs 5800 per 40 Kg. The rate of Banola is in between Rs 1900 to Rs 2000 per maund.
Chairman Karachi Cotton Brokers Forum Naseem Usman told that over all bullish trend was witnessed in the rate of cotton. The rate of Promise (Waday Ka Bhao) of New York Cotton after increasing remained in between 88 American cent to 90 American cent.
According to the weekly USDA export report the exports witnessed a decline of 34 percent as compared to last week. However, the market remained stable due to decrease in the rate of dollar. Although, the rumours of trade conflict had China and India is effecting the rate of cotton.
The increasing trend was witnessed in the rate of cotton in Brazil, China and Australia while significant increase was witnessed in the rate of cotton in India because India had signed an agreement with Bangladesh for selling ten lac bales of cotton. As a result of which the rate of cotton in India increased by Rs 800 to Rs 900 per candy (356 kg). Moreover, Cotton Cooperation of India has increased the rate of cotton by Rs 200 to Rs 300. China has started selling of old stock of cotton.
Meanwhile, the Pakistan Cotton Brokers Forum was recently formed. Its president Major (retd) Muhammad Kashif Islam in its statement said that the rise in cotton prices in the international cotton market and a significant decline in local cotton production were the reasons due to which there is little hope of further decline in cotton prices.
He also said that some brokers have spoiled the market trade and the PCBA will try to rectify this. Moreover, PCBA with the support of APTMA, PCGA, KCA will try to bring improvement in business.
Meanwhile, according to the Pakistan Cotton Centre Research Institute, a meeting of the Cabinet’s Economic Co-ordination Committee chaired by Finance Minister Shaukat Tareen approved the fixing of price of cotton at Rs 5,000 per maund.
A summary was presented by the Ministry of National Food Security and Research at the meeting on setting the price of cotton to promote cotton crop and activating the Trading Corporation of Pakistan in order to stabilize the price of cotton in the local market.
It was informed in the meeting that in the first phase, Trading Corporation of Pakistan will buy 2 lac cotton bails and then considering the situation in the local market, increase its purchasing process.
The ECCC present at the meeting agreed to formulate a strategy for the future regarding the sale of cotton and the prices of cotton in the local cotton market.
The ECCC also approved the formation of a Cotton Price Review Committee to review market prices and propose intervention on a fortnightly basis.
The Cotton Price Review Committee will be headed by the Federal Secretary, Ministry of National Food Security and Research and will include representatives of the farmers’ private sector and senior officials of the Ministry of National Food Security.
The fourth meeting of the Farm Advisory Committee was held at Central Cotton Research Institute, Multan under the chairmanship of Director Dr. Zahid Mahmood. The meeting reviewed the cultivation of cotton across the country.
Copyright Business Recorder, 2021