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LAHORE: The Spot Rate on Friday remained unchanged at RS 16,700 per maund. The market remained steady and the trading volume remained low.

The prices of Phutti and Banola showed no change due to less demand, said cotton analyst Naseem Usman while talking to Business Recorder. According to him, Phutti of Sindh was traded from Rs 4500-7300 per 40 kilograms; Punjab’s Phutti attracted per 40 kilograms prices from Rs 5500 to Rs 7800. Similarly, Phutti from Balochistan was traded at Rs 6500 per 40 kilograms to Rs 7800 per 40 kilograms.

Cotton of Sindh was traded from Rs 13,500 to Rs 17,000 per maund, Punjab’s cotton was traded from Rs 14,500 to Rs 17,000 per maund and Balochistan’s cotton prices remained from Rs 16,000 per maund to Rs 16,500 per maund. While Banola from Punjab was traded from Rs 1,350 to Rs 2,300 per maund, Punjab’s crop was traded from Rs 1,800 to Rs 2,300 per maund and Balochistan’s Banola was traded from Rs 1,700 to Rs 2,300 per maund, added Naseem Usman.

As many as 400 bales of Rahim Yar Khan were sold at Rs 16,900 per maund, 200 bales of Chichawatni were sold at Rs 16,000 per maund, 200 bales of Chistian were sold at Rs 15,000 per maund, 600 bales of Vehari were sold at Rs 14,800 per maund, and 600 bales of Layyah were sold at Rs 14,000 per maund.

The Price of Polyester Fiber was available at Rs 245 per kg. Punjab’s textile industry on Tuesday expressed concern over increase in gas tariff from $6.5 to $9 per million British thermal units (mmBtu) for export-oriented units in the province and urged the federal government to withdraw the revised rates at the earliest.

Meanwhile, Punjab Minister for Industries Mian Aslam Iqbal assured a delegation of All Pakistan Textile Mills Association (Aptma) of taking up the issue with the federal government. “I will take up the issue of gas price hike from $6.5 per mmBtu to $9 per mmBtu for export-oriented units in Punjab with the federal government at all appropriate levels as it has led to a huge price disparity among provinces,” Iqbal said.

The Aptma delegation, led by its chairman (Northern Zone) Hamid Zaman, briefed the minister about the gas price disparity between Punjab and other provinces. Gas prices in Sindh and Khyber Pakhtunkhwa are $4.87 per mmBtu compared to Punjab where rates have been hiked to $9 per mmBtu. Zaman said gas price of $4.05 per mmBtu in Bangladesh and $5.19 per mmBtu in India was also much lower than the tariff applicable to Punjab-based export industry.

“The Regionally Competitive Energy Tariff provided by the current government over the past three years has yielded outstanding results. The industry has invested Rs 450 billion in machinery for capacity enhancement as per commitment,” he added.

Finally, the premature celebration of fortnightly cotton arrivals has tamed down! Back in October 2021, fortnightly arrivals as reported by Pakistan Cotton Ginners Association (PCGA) were double that of last year. The rate has fallen precipitously since, with latest fortnightly data for November end reporting arrivals up only 54 percent over last year.

Is that performance not impressive still? Not particularly, considering that arrivals of 7.2 million bales (to date) are only higher compared to last year, and second lowest in at least 33 years. But more importantly, arrivals received during last fortnight were lowest since at least FY16, and half of the volume received during same period last year: dropping from 0.62 million bales to 0.31 million bales.

Although both cotton output and per acre productivity are showing signs of recovery, latest fortnightly arrivals position further strengthens the early peaking theory, proposed in this space since the current harvest season began. Historically, no more than one-third of seasonal cotton output is picked and sold to ginneries by September end. This trend has shown early peak during the ongoing season, with nearly half of total seasonal output received by September end.

The preponement of cotton arrival now means that forecast of seasonal output, which was earlier revised upwards thanks to euphoria over initial performance, may now once again be due for a downward revision. PCGA data indicates that arrivals in Sindh are now as good as over, and may in fact be reflecting cross-border flows from the Northern Province.

USDA’s National Agricultural Statistics Service (NASS) released their December crop reports today. Becky Sommer with NASS in Washington D.C. says the U.S. cotton production estimate is still up 25 percent from last year’s crop.

All cotton production is forecast at 18.3 million 480 pound bales, up less than 1 percent from the previous forecast, and up 25 percent from 2020.

Based on conditions as of December 1, yields are expected to average 885 pounds per harvested acre, up 5 pounds from the previous forecast and up 38 pounds from 2020. All cotton area harvested is forecast at 9.92 million acres, unchanged from the previous forecast, but up 20 percent from 2020.

As of November 29, eighty-five percent of the cotton acreage was harvested, 2 percent ahead of last year and 6 percent ahead of the 5-year average. Cotton production in Georgia is forecast at 2.3 million bales, up 6 percent from last year. In Alabama, production is forecast at 755,000 bales, up 3 percent from 2020. Florida production is expected to total 130,000 bales, 26 percent above last year.

Copyright Business Recorder, 2021

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