LAHORE: The market remained dull on Thursday. 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.
Saqib Naseem, Chairman Pakistan Yarn Merchants Association (PYMA), Muhammad Junaid Teli, Vice Chairman, Sind & Balochistan region, while expressing deep concern over the continued appreciation of the dollar and the significant depreciation of the rupee, appealed to Prime Minister Shehbaz Sharif, Finance Minister Miftah Ismail and Governor SBP to take immediate steps to curb the rising dollar.
They warned that if effective strategy is not adopted, then industries including domestic market especially SME sector will be destroyed.
PYMA office bearers said that in the inter-bank market, the dollar has risen to a high of Rs 199, while in the open market the dollar has exceeded Rs.200. As a result of which it is becoming almost impossible to run business and run industries, the government needs to take serious steps to save the economy from catastrophe.
Saqib Naseem, Junaid Teli further said that due to non-receipt of dollars, documents in banks are not being cleared, which is a big problem for the business community and the domestic market, especially SMEs, has been devastated.
PYMA office bearers said, “40% of raw materials are imported for the fulfilment of export orders, the rising dollar has also made the raw material more expensive which has made it difficult for timely completion of export orders.”
Saqib Naseem, Junaid Teli appealed Prime Minister Shehbaz Sharif, Finance Minister Miftah Ismail and Governor SBP to devise such a strategy to prevent the rupee from depreciating and the dollar from appreciating. This will help reduce business and production costs. Otherwise, it will be impossible for the business industry, SMEs, to survive.
Cotton yarn markets has yet to pick in Bangladesh as expected by most of yarn exporters from India immediate after Ramadan month. Domestic yarn price in Bangladesh for 30 CCH is still in range of $ 5.35-5.50 per kg. Due to which general Indian 30 CCH yarn is not in demand above $ 5.00-5.10 per kg.
Weak garment orders from their overseas buyers, mainly for European nations, is major reason for slow yarn demand. Bangladeshi yarn buyers are finding better values in yarn imports from Vietnam and Indonesia etc.
In local markets, spinners are increasing their sales price of cotton yarn but buying is confined to immediate requirements, therefore sale volumes are very low. Reduction in yarn production has reduced selling pressure with spinners to a little extent.
ICE cotton futures fell more than 3% on Wednesday on concerns over reduced demand from top consumer China due to COVID lockdowns and likely rain in key West Texas growing regions which could help boost supply.
Cotton contracts for July were down 4.87 cent, or 3.3%, at 143.59 cents per lb, as of 12:10 p.m. ET (1610 GMT). Prices traded within a range of 143.16 and 149.17 cents a lb.
Along with headwinds from a hint of rain in West Texas, “all the energies are down, grains are down. All the livestock is down, gold and silver’s downs, stock markets, stock indexes are down so, a red day on the quote screen,” said Keith Brown, principal at cotton broker Keith Brown and Co in Georgia.
Concerns of slowing demand from China along with a stronger dollar also weighed on the market, Brown added. A stronger dollar makes the natural fiber more expensive for overseas buyers.
US grains futures fell on Wednesday following a report about the United Nation’s efforts to restore Ukraine grain shipments and forecasts of ample Russian supplies as worries about high prices curbing demand weighed on sentiment.
Oil prices slipped, translating into cheaper polyester, a substitute for cotton. Total futures market volume fell by 4,036 to 21,283 lots. Data showed total open interest fell by 176 to 202,738 contracts in the previous session.
China cotton futures on the Zhengzhou Commodity Exchange were down 0.9% at 21,120 yuan per tonne. The spread between China futures and US cotton was 134.1 cents as of 12:10 p.m. ET (1610 GMT).
The Spot Rate remained unchanged at Rs 21000 per maund. The price of Polyester Fiber increased by Rs 5 and was available at Rs 300 per kg.
Copyright Business Recorder, 2022