KARACHI: The rate of quality cotton remained stable at Rs18000 per maund while the rate of Phutti remained stable at Rs 9000 per 40 kg and the spot rate remained stable at Rs 17500 per maund.
There is an increase of 70 percent is recorded in the production of cotton. It is expected that 80 lac bales will be produced in the country while 70 lac bales will have to be imported whose cost will be 50 percent more as compared to the import cost of last year. Up till now import agreements of 45 lac bales have already been signed. It is expected that cotton production will increase next year as the farmers have gotten a good price of Phutti.
In the local cotton market during the last week textile and spinning mills remained involved in buying of quality cotton while ginners remained involved in selling Phutti on high rates. The trading volume remained low because the rate of cotton reached at historic level. Bullish trend remained continued in international cotton markets except India where the rate of cotton decreased after increase in the arrival of new crop and due to the coming of news regarding decrease in the export.
The rate of cotton reached the historic level of Rs18000 per maund in the local cotton market, while the rate of Phutti reached at Rs 9000 per 40 kg. The rates of Khal and Banola also witnessed an increase.
According to the sources of All Pakistan Textile Mills Association the rate of cotton has already increased due to parity between the rate of cotton and yarn so there are few chances that the rate of cotton will increase further.
An international commodity company had bought four lac bales of cotton on low rates from market. The company is now selling cotton to textile mills on high rates due to which the rates of cotton will be steady. The Spot Rate Committee of the Karachi Cotton Association closed the spot rate at the highest level of Rs17500 per maund.
It is expected that due to expansion in textile and spinning sector the demand of cotton will be one crore 65 lac bales while the cotton production will be of 80 lac bales. It is expected that around 70 lac bales will be imported from abroad to meet the demands of local industry. According to private importers up till now import agreements of forty five lac bales have been signed.
The rate of cotton in Sindh as per quality is between Rs 13000 to Rs 18000 per maund. The rate of Phutti is between Rs 5500 to Rs 7600 per 40 kg. The rate of Banola is between Rs 1400 to Rs 2200 per maund.
The rate of cotton in Punjab is between Rs 16000 to Rs 18000 per maund. The rate of Phutti is between Rs 5800 to Rs 8400 per 40 kg. The rate of Banola is i between Rs 1500 to Rs 2250 per maund.
The rate of cotton in Balochistan is between Rs 15500 to Rs 17500 per maund. The rate of Phutti in Balochistan is between Rs 6300 to Rs 9000 per 40 kg while the rate of Banola is between Rs 1500 to Rs 2300 per maund.
The Spot Rate Committee of the Karachi Cotton Association extraordinarily increased the price by Rs 1200 per maund and closed it at Rs 17500 per maund.
Chairman Karachi Cotton Brokers Forum Naseem Usman told that the increasing trend remained continued in international cotton markets. The Rate of Promise (Waday Ka Bhao) of New York Cotton for December is 119 American cents while the Rate of Promise (Waday Ka Bhao) of New York Cotton for the month of March is 115 American cents.
According to the weekly export and buying report, more than one lac thirty six thousand bales were sold which was seven per cent more as compared to last week while more than seventy seven thousand bales were exported which was eleven percent less as compared to last week. Vietnam, China and Turkey were overall biggest importers while bullish trend was witnessed in Brazil, Central Asian States, Africa and Afghanistan while bearish trend was witnessed in India because of the arrival of new cotton crop, as well as due, to the news regarding decrease in the exports.
Moreover, in a meeting with Naseem Usman chairman Pakistan Cotton Ginners Association Muhammad Sohail Harl told that there is a need that the government departments should actively play their role in increasing the production of cotton. Meanwhile, the association is also planning to make ginning business viable by solving the issues of taxes.
They are also planning to run ginning factories on solar energy while there are plans to replace old machinery with the new one. They are also working on new trade contracts between ginners and textile mills.
The textile sector of Pakistan continues to show strong growth as exports stood at $6.02 billion with an increase of 27 percent in the first four months of the ongoing fiscal year 2021-22 as compared to $4.76 billion during the same period last year.
As per the data released by the Pakistan Bureau of Statistics (PBS), value-added textiles exports posted a whopping 25% YoY growth to US$4.87 billion as compared to US$3.89 billion in last year.
Moreover, exports of readymade garments increased by 22% YoY as quantity exported was up by 20% YoY, bed wear exports increased by 21% YoY as quantity was up by 24% YoY, knitwear exports rose by 35% YoY as quantity declined by 13% YoY.
This is a continuation of the eight-month trend of double-digit year on year basis growth in exports as post-vaccination international markets are reopening, triggering demand for textile products.
International cotton prices by 14%YoY to 127.3/Ib since October 21 while on a cumulative basis since January 2021 there was an increase 50.4% observed in the prices.
As demand for textile products is on rising exceptionally, it is safe to say that cotton prices are expected to stay robust. Global textile dynamics continue to remain favourable for the local textile industry as the trade war between US and China shall benefit the textile industry in the future also.
Copyright Business Recorder, 2021
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