KARACHI: Cotton prices continued to decline. The government resolved the electricity dispute of the textile and export sector. Textile export expected to reach 22 billion dollars.
Textile sector termed the government’s announcement of fixing regionally competitive electricity rate of Rs 19.99 paisa per unit as a wave of fresh air for the textile export sector.
World Cotton Day was observed all over the world in the cotton producing countries. In Pakistan world cotton day was celebrated by Karachi Cotton Association, World Wild life Fund, Pakistan Central Cotton Committee and Karachi Cotton Brokers Forum.
It is hinted that government will cooperate with farmers for increasing the cotton crop in the country. Agreements for the import of forty five lac bales of cotton have already been signed.
In the domestic cotton market, the decline in cotton prices continued during the last week. In addition to the strong fall in the demand and price of cotton yarn in the local yarn market, export orders for textile products have slowed down due to the recession in the international markets, especially in Europe and America, the largest importer of textile products. Due to the slow down textile sector is in crisis in many countries. More than half of the textile and related sectors are closed. There is a huge financial crisis in the markets.
Although, the rupee is getting stronger day by day against the dollar, while the rate of Future Trading of the New York cotton is also decreasing overall after fluctuations and had reduced to a low level of 82 US cents per pound, under the influence of which the price of cotton is also decreasing because large
groups are signing contracts for the import of cotton from abroad. Up till now contracts for the import of 45 lac bales have been signed.
Heavy rains and devastating floods have caused extraordinary damage to the cotton crop in the country, due to which cotton production in the country is expected to be around 65 lac bales, while many textile mills are closed and many mills are partially operational due to which demand will also be decreased.
It has been seen many times that when the cotton production is low, the mills
sign import contracts of cotton as a result of which it will be difficult to sell cotton in the country at the end of the season.
According to the experts this year too, it may be difficult to sell cotton at the end of the season because the quality of local cotton is relatively low and the price of cotton is not suitable for the mills due to which textile mills are signing contracts for the import of cotton in large quantity from foreign countries.
The rate of cotton in Sindh as per quality is in between Rs 16,000 to Rs 18,500 per maund. The rate of Phutti is in between Rs 7,000 to Rs 8,500 per 40 kg.
The rate of cotton in Punjab is in between Rs 18,000 to Rs 20,000 per maund while the rate of Phutti is in between Rs 7,500 to Rs 10,000 per 40 kg. The rate of cotton in Balochistan is in between Rs 18,000 to Rs 19,000 per maund and the rate of Phutti is in between Rs 8,000 to Rs 9,700 per 40 kg.
The Spot Rate Committee of the Karachi Cotton Association decreased the spot rate by Rs 200 per maund and closed it at Rs 18,800 per maund.
Naseem Usman, Chairman of Karachi Cotton Brokers Forum, said that there was an overall bearish trend in the international cotton markets. The rate of Future Trading of New York Cotton after fluctuation remained at 84 American cent per pound.
The prices of cotton in India are declining because of increase in the production of cotton the rate of cotton is continuously declining. The rate of Shankar 6, cotton dropped to a low of Rs 69,000 per candy and is tipped to drop further.
According to USDA’s weekly export and sales report for 2022-23, one lac twenty one thousand and two hundred bales were sold.
Pakistan is on number first after the purchase of 69,400 bales but with the decrease of 3,500 bales.
Turkey stood second with a decrease of 6,400 bales, including the purchase of 14,000 bales.
Bangladesh bought 12 thousand 100 bales and came third.
48,500 bales were sold for 2023-24.
Pakistan was at the top by buying 22,900 bales. Guatemala was second with 10,100 bales while Honduras was third with 10,000 bales.
The representatives of value-added sector of Pakistan on the directions of Prime Minister Pakistan Shehbaz Sharif met federal minister for Finance and Revenue Ishaq Dar.
Chairman Pakistan Apparel Forum Muhammad Javed Bilwani and Chairman Pakistan Hosiery Manufacturers and Exporters Association Muhammad Babar Khan welcomed decision of the government’s of fixing the regionally competitive rate of Rs 19.99 paisa per unit for the export oriented industry. They termed it as a wave of fresh air for the textile sector. They also said that with the efforts of Finance Minister Ishaq Dar long standing issue of the industry was solved. As a result of this decision export oriented sector will take decisions on the export orders.
Javed Bilwani and Babar Khan told Prime Minister Shahbaz Sharif that due to efforts of value added sector Pakistan has touched the mile stone of exports of worth more than thirty one billion dollar in 2021-2022 of which the share of textile sector is more than nineteen billion dollars.
Chairman of Pakistan Apparel Forum Muhammad Javed Balwani said after a successful meeting with the Finance Minister that this key decision will increase the exports of the textile export sector rapidly in which the exports of knitwear and hosiery exports will increase from 6 billion dollars. He also said that Value Added sector is the largest foreign exchange earning sector which is also the backbone of the national economy adding that industrialists will work day and night to provide employment to millions of citizens. The value-added textile export industry will provide employment to more than 41 percent of the citizens. More than 40 related industries of textile export sector are also involved in value added textile industry.
Exporters all over Pakistan are very happy with the regionally competitive electricity rates for Pakistan’s textile export industry.
After getting the regionally competitive rates textile export industry will try to increase its exports from increased its exports from 19 billion dollars to approximately 22 billion dollars in the current financial year. It will create new employment opportunities and stable the economy.
The Karachi Cotton Association celebrated World Cotton Day in the office of the Association on October 07, 2022 to highlight the global importance of cotton and the challenges faced by the world’s cotton economies specially Pakistan.
Speaking on the occasion, Muhammad Atif Dada, Chairman, the Karachi Cotton Association emphasized upon the need to increase cotton production in the country and urged upon the Government to take all steps on war footing basis in this regard. He also emphasized upon the need to introduce Standard Sale/ Purchase Contract of Raw Cotton to ensure the sanctity of the Contract of Raw Cotton.
Copyright Business Recorder, 2022