Spot rate unchanged as dullness persists on cotton market

LAHORE: The local cotton market on Monday remained dull while the trading volume remained low.

Cotton Analyst Naseem Usman told that the rate of cotton in Punjab and Sindh is in between Rs 18000 to Rs 20,000 per maund. 1350 bales of cotton of Khairpur were sold at Rs 21100 per maund.

Expressing deep concern over the sharp rise in the value of dollar, chairman of the Pakistan Yarn Merchants Association (PYMA) Saqib Naseem and the association’s vice chairman for the Sindh-Balochistan region Muhammad Junaid Teli requested State Bank of Pakistan’s (SBP) Governor Reza Baqir to adopt effective strategies for stabilising the value of rupee.

They warned that sharp decline in the value of rupee would have a deep impact on inflation as it would increase the cost of doing business, thereby making Pakistani goods non-competitive in the export market and unaffordable in the domestic market.

The two senior office-bearers of PYMA highlighted the negative effects of the rising value of dollar on the country’s economy, especially business activities, and said that on the one hand inflation was continuing to rise and on the other the continuous decline in the rupee’s value was leading to a huge increase in production costs relating to the yarn business and industries.

They said, “Raw materials are not available in the country as per the demand of the industries. The industries have to import the raw materials from abroad in order to keep production activities going. However, these days the soaring value of the dollar has put the business community in a difficult position. In particular the production costs of SMEs have skyrocketed.”

Naseem and Teli both requested the SBP governor to initiate measures to stop further depreciation of the rupee and to prevent the dollar from appreciating, and also adopt strategies that reduce the cost of doing business.

This, they said, would definitely give a boost to trade and industry and create ample employment opportunities.

With input costs increasing more than prices, Brazilian farmers might plant less cotton, according to Brazilian Assoc. of Cotton Producers (Abrapa) president Julio Busato. He told Reuters the reduced cotton acres would likely be switched to corn or soybeans.

The Spot Rate remained unchanged at Rs 20,500 per maund. The rate of Polyester Fiber was increased by Rs 2 and was available at Rs 290 per kg.

Copyright Business Recorder, 2022