KARACHI: Due to extraordinary fluctuation in the market it is difficult to determine the direction of the market. Adopt the policy of following the market trend. After the fluctuation bearish trend prevails in the market. Financial crisis is increasing in the market. Now All Pakistan Textile Mills Association will grow cotton. Textile policy deferred for the fifth time.
Central Cotton Research Institute Multan has conducted experiment of increasing the crop production through artificial rain. In the local cotton market during the last week due to the cautious buying by the textile and spinning mills bearish trend prevails in the market after fluctuation.
Under the influence of Rate of Promise (Waday Ka Bhao) of New York Cotton it was difficult to determine the direction of the market. The ginners and the textile mills had adopted the policy of following the market trend.
During the last week the quality of cotton was affected due to rains in the cotton growing areas. Good quality of cotton was available in less quantity. Due to high rates of cotton as compared to last year's financial crisis is increasing in the market. Partial arrivals of the shipments of the cotton imported by the textile mills have already started and they were paying for it.
On the other hand many textile mills had sold yarn on lending basis and they were facing difficulties in their payments due to which they were in financial crisis. Although, the textile mills are in better condition as compared to last year; hence they are bearing the financial crunch to some extent. However, mills which are not financially sound are buying cotton on available rate due to which stability was witnessed in the market to some extent but overall rate was determined with the Rate of Promise (Waday Ka Bhao) of New York Cotton.
A week before fluctuation of 5 to 6 American cents was seen in the Rate of Promise (Waday Ka Bhao) of New York Cotton under the influence of which fluctuations of Rs 500 to Rs 600 was witnessed in the local cotton market while the rate of cotton reached at the highest level of Rs 15000 per maund and the rate of Balochi cotton reached at the highest level of Rs 15500 per maund.
However, overall a bearish trend was observed in the rate of New York Cotton due to which the rate of New York Cotton was in between 103 pounds to 116 pounds. According to the monthly report of World Agricultural Supply and Demand Estimates (WASDE) in which the estimates of cotton production were given, due to increase in the production of cotton worldwide the production of cotton in Pakistan was also increased as compared to the production of last year. The rate of cotton decreased in China due to energy crisis. According to the expectations cotton production decreased in India and Pakistan.
According to the experts, increase in the production of cotton worldwide and its demand is creating negative impact on the rate of New York Cotton. Whereas decrease in the production of cotton in India and America can bring positive impact on market.
Due to 30 per cent increase in the production of cotton as compared to last year the production of cotton worldwide witnessed an overall increase of 6 Lac ninety thousand bales. While due to energy crisis in China the demand of cotton decreased by more than 7 Lac bales. The opening and ending stock of cotton worldwide is 10 Lac bales and 4 Lac fifty thousand bales, respectively.
The rate of cotton in Sindh after fluctuation was in between Rs 12000 to Rs 14500 per maund. The rate of Phutti was in between Rs 4000 to Rs 6100 per 40 kg. The rate of Banola was in between Rs 1350 to Rs 1900 per maund.
The rate of cotton in Punjab was in between Rs 14000 to Rs 15000 per maund. The rate of Phutti was in between Rs 5500 to Rs 6400 per 40 kg. The rate of Banola was in Rs 1600 to Rs 2000 per maund.
The rate of cotton in Balochistan was in between Rs 13600 to Rs 14500 per maund. The rate of Phutti was in between Rs 5900 to Rs 7000 per 40 kg. The rate of Banola was in between Rs 1600 to Rs 2000 per maund.
The Spot Rate Committee of the Karachi Cotton Association decreased the spot rate by Rs 300 and closed it at Rs 14300 per maund.
Chairman Karachi Cotton Brokers Forum Naseem Usman told that overall a bearish trend was observed in the international cotton markets. The Rate of Promise (Waday Ka Bhao) of New York Cotton after fluctuation remained low.
The rate of New York Cotton on Thursday after increasing by three American cents closed on 107.10. On Friday since morning the Rate of New York Cotton started increasing privately and till the evening after increasing by 4 American cents crossed the level of 111 American cents but in the evening after the USDA export report which showed 53 per cent decrease in sales the rate of New York Cotton that had increased by 4 American cents from the morning, again dipped by 4 American cents and reached 107 American cents.
In this way fluctuation of 8 American cents was witnessed in one day in the Rate of Promise (Waday Ka Bhao) of New York Cotton.
For the last many weeks China was the biggest importer as per USDA report but due to the festival holidays in China from October 1st to October 7th, it was not involved in buying.
However, textile mills are taking interest in buying local cotton. Moreover, the bullish trend continued in the rate of cotton in India, Brazil, Central Asia, Africa and China.
WASDE report also hinted that cotton production may decrease in India, America and China while in Pakistan cotton production may increase by 30 per cent.
The Economic Coordination Committee (ECC) of the cabinet under the chair of finance minister Shaukat Tarin has failed to muster support for the much-awaited draft Textile and Apparel Policy 2020-25 and it has constituted a sub-committee to resolve the issues before its next meeting.
It is pertinent to mention here that announcement of textile policy is deferred for the fifth time in less than one year.
However, Central Cotton Research Institute (CCRI) Multan has demonstrated artificial rain technology for the first time with a view to study its impact on different varieties of cotton. According to the CCRI spokesman, CCRI Multan scientists demonstrated the technology in the presence of research body's director Dr. Zahid Mahmood and it would help researchers see what varieties are most affected by rain and what damaged the least.
The artificial rain dropped on an acre of cotton experimental fields at CCRI Multan where different varieties were under monitoring. It would help scientists to judge the rain impact on seed germination, fibre quality, its blackness, its colour, fungus in bolls, weeds and pest infestation on each cotton variety, the spokesman said. The capability would help experts prepare guidelines for cotton farmers in areas that witness more rains to enable them minimize rain-related crop damages.
Spokesman said that CCRI was continuing with its research to enable farmers be smart enough to negotiate climate change phenomenon and get good production results.
All Pakistan Textile Mills Association (APTMA) Patron-in-Chief Gohar Ejaz has announced that the textile industry is going to invest $5 billion by adding 100 new textile plants which will provide 500,000 new jobs and increase textile exports.
He also said that due to the farmer-friendly atmosphere it is expected that cotton production will be increased by 50 per cent as compared to last year. It is expected that this year nine million bales will be produced in the country. Last year, Rs 200 billion were disbursed among farmers as the payment of their crop. This year it is expected that Rs 600 billion will be disbursed among farmers as a price of their crop which is Rs 400 billion higher as compared to last year.
He also said that we will get better results after 2010. APTMA cotton foundation had taken decision regarding promotion of model farming. Sources claimed that APTMA has taken a land of 600 acres for developing a model farm. Moreover, APTMA had signed an MOU for growing cotton on 30,000 acres of land in Tajikistan.
Copyright Business Recorder, 2021