KARACHI: The spot rate of cotton closed at Rs 22500 with an increase of Rs1500 per maund. A bearish trend was reported in the rate of cotton in international market. There is a gradual increase in the arrival of new crop of Phutti. The price of Phutti is in between Rs10000 and 11000 per 40 kg. The price of cotton per maund is Rs. 23,000. Irrigation water is available partially, as the heatwave continues.
The arrival of Phutti partially started in local cotton market during the last week. About 1000 bales have been produced. The supply of Phutti has been increasing, gradually. Many ginners in Sindh and Punjab have started buying, which means in the coming days more ginning factories will start operation. Up till now Phutti is partially coming from the cotton growing areas of Sindh. It is expected that partial arrival of Phutti will soon start from the cotton growing areas of Punjab.
The price of Phutti in Sindh province is between Rs. 10,000 to Rs 11000. At present there is not any rate of Phutti announced in the market. Ginning factories in Punjab will take Phutti from Sindh. It will cost Rs. 300 to 350 per 40 kg more due to transportation.
Several ginning factories in Sindh have started buying Phutti. Three or four ginning factories are partially operational and it is expected that by next week more ginning factories will be operational.
In Sindh, deals for new crop cotton have been fixed at Rs. 22,700 per maund but in Punjab they are demanding Rs 1000 more.
In addition, old cotton deals are also taking place in small quantities. Mill-to-mill deals have also been made. Large groups of mills are selling cotton at low prices in exchange for producing cotton yarn due to high price of cotton.
The coming season will be very difficult for all cotton stakeholders as there are issues of cotton parity with cotton yarn, and moreover banks have increased the interest rates. In addition the rate of US dollar is all time high and there are issues of containers and shipments, as well. There is a decrease in the demand of textile products in international markets. These are the problems which make the import and export businesses difficult.
Ginners and millers should be careful while doing business. A little mistake and carelessness can create a big problem. The government has dropped a price hike bomb by increasing the prices of petroleum products by Rs. 30 per litre in one go and the price of electricity will also be significantly increased. In this situation it will be very difficult to run industry. Business will be gravely affected and there will be chaos in the country.
The Spot Rate Committee of the Karachi Cotton Association register deals for the new cotton season from July to August every year. The deals before that will not be reported. The new spot rate will also be imposed from July 1.
In Sindh and Punjab, the price of old cotton is Rs 21000 to Rs 22500 per maund. The price of new crop is Rs 23000 to Rs 23350 per maund. The rate of New Phutti is in between Rs 10,000 to Rs 11000 per 40 kg.
The spot rate committee of Karachi Cotton Association has increased the spot rate by Rs1500 per maund and closed it at Rs. 22500.
There is a water crisis in some areas of Sindh and Punjab, as well as, high temperature affecting the crop. However, supply of irrigation water has started partially in some areas.
The agricultural institutes of Punjab province keep on reporting the situation of cotton production from time to time but the agricultural institutes of Sindh province are silent due to which there are rumours regarding production of cotton.
Naseem Usman, Chairman, Karachi Cotton Brokers Forum, said that after the fluctuations in the international cotton markets, there was a general downward trend. New York Cotton’s Rate of Future Trading for the month of July hovered between 141 and 145 US cents per pound and then closed at 140 cents.
According to the USDA’s Weekly Export and Sales Report, sales of 37,000 bales for 2021-22 were sold, which is 67% less from the previous week.
India topped the list with 21,200 bales. Vietnam came second with 9,800 bales, while China came third with 6,300 bales.
More than 95000 bales were sold for the year 2022-23. El Salvador topped the list with 22,300 bales. Turkey came second with 19,800 bales. Pakistan came third with 19,100 bales.
Secretary Agriculture South Punjab Saqib Ali Ateel has claimed that cotton have been cultivated over 3.6m acres across the province, which is 90pc of the set target. He expressed these views during a meeting held at Mango Research Institute. He said that cotton sowing was still under way and added that target would be achieved easily due to availability of water.
Moreover, the secretary apprised that 121 demonstration plots have been established across South Punjab, adding that that Integrated Pest Management (IPM) was being used to control harmful insects. He informed that farmers were also being motivated in this connection. Taking the current heatwave as a factor against the protection of crops, secretary termed it a challenge to maintain the crops’ health including of cotton as different impacts have been observed in various areas. He directed officials to pay more focus in this matter. He urged farmers for early pesticide treatment for attack of white fly, jassid and thrips on early-cultivated crop.
Agriculture experts have stressed the need for promoting economically-efficient and environment-friendly innovative solutions for agricultural production to enhance production and income generation capacity of the farmers.
These observations were made by the speakers during a three-day workshop on organic cotton on Thursday. The speakers called for organic cotton production which aims to bring sustainability by reducing the use of pesticides, synthetic fertilizers and water.
It was also stressed that organic cotton supports biodiversity conservation and promotes agro-forestry in Pakistan whereas conventional cotton production practices with excessive use of chemical fertilizers and pesticides, pose threat to wildlife and lead to degradation of habitats and ecosystems.
Speaking on the occasion, Dr Masood Arshad, Senior Director Footprint, WWF-Pakistan said that Pakistan is the fifth-largest producer of cotton in the world and has the third-largest cotton spinning capacity in Asia, after China and India.
He said WWF-Pakistan is promoting organic cotton with sustainable practices, which has resulted in a 22 percent reduction in pesticides, 12 percent reduction in the use of irrigation water and 19 percent reduction in the use of synthetic fertilizer, which ultimately reduces the per unit greenhouse gas emissions at the farm level, compared to cotton produced by non-participating farmers. This has helped empower disadvantaged groups in the society who largely depend on cotton production, he added.
Syed Habib Shah from Balochistan said: “We, in collaboration with WWF-Pakistan, are highly enthusiastic to promote organic cotton production and ensure its certification under the global organic standards”.
He added that Balochistan holds huge potential of organic farming and with joint efforts and some needed developments; we can earn a sizeable benefit for the farming community and the country’s economy.
Dr Shafqat Saeed, Dean MNS University of Agriculture Multan, shared that this is the time to develop synergies and shift our conventional farming to nature based farming.
He said that at MNS University, we are experimenting and formulating best biological solutions to promote soil and plant health leading to support organic farming in Pakistan.
Copyright Business Recorder, 2022