KARACHI: Trading volume in local cotton market remained low. A bearish trend was witnessed after fluctuation in international cotton market. Negative effect of war between Russia and Ukraine are seen over market sentiments.
Prime Minster Imran Khan has established a Cotton Authority for increasing the production of cotton in the country. Representatives of Pakistan Cotton Ginners Association, All Pakistan Textile Mills Association, Karachi Cotton Association and Pakistan Kissan Ittehad should be part of authority along with bureaucrats. The control of Pakistan Cotton Authority should not be given to irresponsible persons on the pattern of previously established Cotton Task Force.
Prime Minster Imran Khan should also focus on increasing the production of cotton along with the policy of investment, and promotion of real estate sector.
As per details, during the last week local market remained dull because the mills want to buy cotton on credit due to their financial crunch. Some ginners had good quality cotton but in a very limited quantity. They were not ready to sell it on low rates due to which the trading volume remained low. Big textile groups were buying imported cotton on reasonable rates.
Although, the trading volume remained low, the stock of cotton available with the ginners is decreasing. However, an international organisation is selling cotton privately but it was not reported.
It is expected that rate of polyester fibre will increase after increase in the prices of petroleum products. It could be safely said that polyester may be the alternative of cotton. If the price of polyester increases then there are no chances that rate of cotton will decrease.
Major reason behind this is that the stock of cotton is very low, while the arrival of imported cotton has started but there are chances that arrival may be delayed due to Russia and Ukraine war. Political uncertainty is also increasing in Pakistan so it is expected that it will affect the business.
The rate of cotton in Sindh is in between Rs 18000 to Rs 20,000 per maund. The rate of cotton in Punjab is also in between Rs 18,000 to Rs 20,000 per maund. Phutti is available in very limited amount while the rate of Banola and Khal is stable. The Spot Rate Committee of the Karachi Cotton Association has kept the rate stable at Rs 20,000 per maund.
The rates of cotton are increasing in the international cotton market due to Russia-Ukraine war. The consumption of cotton in India is increasing while the production of cotton is twelve lac bales less than the initial estimates. In the same way consumption of cotton in Bangladesh has increased and it is facing problems.
Rationally both India and Bangladesh export cotton but this time they are requesting their governments that they should be allowed to import cotton. It looks very difficult that prices of cotton in international market go decreased. USDA weekly export rate also shows increase in both sales and export. It shows that rates of cotton in coming days will come down.
Chairman Karachi Cotton Brokers Forum Naseem Usman told that bullish trend remained prevails in the international cotton market. The main reason behind is that situation remained tense due to Russia-Ukraine war. Moreover, the rate of New York Cotton for the month of March after increasing reached 123 cents and for May is in between 119 cents to 120 cents.
On Friday the rate of Future Trading of New York Cotton witnessed a decrease of two to three American cents According to the weekly export report of USDA more than three lac forty eight thousand bales were sold which was forty one percent more as compared to last week. Vietnam was on number one with ninety six thousand bales, China was on number two with more than seventy five thousand bales, Turkey was on number three more than sixty three thousand bales while Pakistan was on the fourth number after buying more than forty two thousand bales.
The rate of cotton in Brazil, Central Asia and Africa remained stable while the rate of cotton in India after fluctuation also remained stable.
Prime Minster Imran Khan had established a Pakistan Cotton Authority (PCA) for increasing the production of cotton in the country while the sowing of cotton for the next season will start after the harvesting of wheat. The sowing of cotton will partially start by the end of March.
Naseem Usman told that that PCA should start its operations immediately; otherwise, this authority will not give the desired results in the same way as the other such organisations in past have failed to give the desired results. It is unfortunate that last year Cotton Task Force constituted by Prime Minster Imran Khan under senior APTMA leadership failed to deliver. They don’t even called a single meeting during the whole last year.
The country’s textile exports jumped 37 percent to hit the highest ever level of $1.69 billion in February on the back of orders captured from competing economies during the Covid peak, official data showed on Thursday.
Complete lockdown in India and Bangladesh had pushed international buyers to seek Pakistani exports. “Pakistan opted for a smart lockdown, instead of going for complete lockdowns, which aided industries in continuing their fight against the pandemic,” a leading textile exporter said.
According to the latest figures of All Pakistan Textile Mills Association (APTMA) and Pakistan Bureau of Statistics (PBS) compiled by Arif Habib Limited (AHL), exports of textile goods jumped to $1.69 billion compared to $1.23 billion in the same month last year, registering massive growth of almost 37 percent. The export figures of textile sector were also up by nine percent as compared to the figures of the preceding month of January this fiscal.
During the first eight months of financial year 2021-22, export of textile goods surged to $12.62 billion against $10 billion in the corresponding months of last financial year, posting a 26.2 percent growth. Pakistan’s textile exports have been on a growth trajectory in the last several months despite gas shortage and expensive power, which shows that the textile exporters are trying to realise the full potential of this sector.
“Pakistan is still benefiting from the export orders it captured in the peak times of Covid in the world, when its competitors went under complete lockdown and Pakistan managed to keep its industrial sector open by opting for a smart lockdown policy,” Javed Bilwani, chairman, Pakistan Apparel Forum said.
He pointed out that though the figures were impressive, the numbers would have been even higher if the country had not faced gas shortage during the winter.
About future prospects, Bilwani feared that export of textile goods might get hurt because of gas shortage, as RLNG prices are rising in the world.
Referring to Russia-Ukraine conflict, the chairman said it has raised some serious concerns about the movement of gas prices in the international market, especially once European nations begin purchasing gas from the global market following supply disruptions from Russia. “A country like Pakistan would be in a vulnerable situation, as expensive RLNG is not affordable for us,” he noted.
However, Executive Member Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and Pakistan Cotton Ginners Association (PCGA) Malik Talat Suhail while appreciating the third Tax Amnesty Scheme and Industrial Incentive Package 2022 by the government, said that the hard work of the FPCCI leadership bore fruits, and finally the government announced an incentive package for the development of industry in the country which is need of the time. He said of course, industrial development in the country will increase.
He said the government’s development package for the real estate sector was not going to yield significant results that would now come from the Industrial Promotion Package 2022 and the five percent tax amnesty for industry that would increase employment.
Malik Sohail said that under the package, rehabilitation of sick industrial units would be practically possible and sick industry would be able to play its role in the development of the country by reviving it.
It is a realistic decision for new industries to start production by June 30, 2024, and foreign Pakistanis will have to make useful of the package.
Under the present package, the textile sector in Pakistan will be further enhanced, for which the announced Cotton Authority needs to be made functional to increase the production of raw cotton resources and especially textile raw materials, i.e., cotton. Real industrial development is only possible by increasing the production of raw materials.
Malik Sohail said that the FPCCI would continue to play its nationally responsible role under the leadership of Mian Anjum Nisar and was constantly striving for the promotion of trade and industry in the country.
Copyright Business Recorder, 2022