Cotton market: Political unrest keeps main participants away

LAHORE: The market remained dull on Monday. 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 21,000 per maund.

He also told that new cotton season for the year 2022-23 parsial started. New crop phutti from cotton areas.of lower Sindh start reaching in Cotton ginning factories. One truck of phutti reached a Burawala cotton ginning factory and one truck of phutti reached a Tando Adam ginning factory while two ginning factories of Sangher open gates for purchase phutti.

The country’s imports during July-April (2021-22) totalled $65.537 billion as against $44.731 billion during the corresponding period of last year showing an increase of 46.51 percent, says Pakistan Bureau of Statistics (PBS).

The exports and imports data released by the PBS revealed that the imports in April were $6.679 billion as compared to $6.407 billion in March 2022 showing an increase of 4.25 percent and by 27.41 percent as compared to $5.242 billion in April 2021.

The country’s overall exports during July-April (2021- 22) totalled $26.247 billion against $20.905 billion during the corresponding period of last year showing an increase of 25.55 percent.

The country’s exports during April 2022 were $2.897 billion as compared to $2.777 billion in March 2022, showing an increase of 4.32 percent and by 30.61 percent as compared to $2.218 billion in April 2021.

Textile group exports during July-April, 2021- 2022 totalled $15.981 billion against $12.688 billion during the corresponding period of last year showing an increase of 25.96 per cent. The textile group exports increased by 7.01 per cent on a month-on-month basis and remained at $1.739 billion in April 2022 compared to $1.625 billion in March 2022. On a year-on-year basis, textile group exports witnessed 30.50 per cent growth in April 2022, when compared to $1.332 billion in April 2021.

Cotton yarn exports registered a growth of 22.11 per cent during July-April 2021-22 and remained at $1.006 billion compared to $823.952 million during the same period of last year, and decreased by 4.95 per cent in April 2022 and remained at $97.655 million when compared to $102.736 million during the same month of last year.

In Indian Gujarat there are 45 lakhs Spindles including SME and corporate operating in 100% cotton fibres. Currently from last week of March month demands has been constantly reducing. Exports of cotton yarn have almost stopped and domestic demand is very weak. Currently there are no takers of cotton yarn because of low demand of cotton yarn in international market.

This is mainly due to international scenario, weak domestic monsoon with almost lowest yield and poor quality and quantity both. Production of cotton is less compared to consumption and even quality of cotton is very weak (low staple length, low colour grade and high short fibre).

Currently cotton price is around 95000 per candy and that too not suitable for combed yarn because short fibre content in cotton is very high resulting 65% yield compared to 70% yield realisation.

As per feedback of our Spinners Association (Gujarat) members all mills have reduced their cotton consumption and yarn production from ranging to 30% to 40%. Which includes one or two day complete holiday and cutting partial production by changing to carded yarn from combed yarn or by increasing finer counts from 20’s & 24’s to 36’s & 40’s. Currently in Gujrat Spinners are making cash loss of 30Rs to 40 Rs. per kg.

Government supported the industry by abolition of 10% import duty in cotton, but this has created panic as international cotton price surge by 20% higher seeking Indian demand for cotton. Indian farmers are getting great price and we Spinner’s support price hike to farmers, but at the same time Spinners wants their reasonable price of yarn, this can happen if the price hike is passed to fabric and eventually to end user.

Long term solution of this problem is to implement “Technology Mission on Cotton 2.0” which Government of India shall operate in mission mode to develop high yield cotton variety, less prone to pest attack and integrated crop management, which will not only solve problem of cotton availability but also double the income of farmers.

The Spot Rate remained unchanged at Rs 21000 per maund. The rate of Polyester Fibre was increased by Rs 3 per Kg and was available at Rs 295 per kg.

Copyright Business Recorder, 2022