KARACHI: Cotton prices continued to decline previous week. There was a slump in international cotton market also. The ongoing crisis in the textile sector is getting worse. However, Ministry of National Food Security and Research has recommended procurement of 10 lac bales of cotton through Trading Corporation of Pakistan (TCP).
In the domestic cotton market, there was almost no buying by the ginners during the past week. Despite panic selling by the ginners there was hardly any trading activity and if there was any activity it was on credit basis. That’s why there is uncertainty in the market that will remain slow in whole month Ramzan.
With every passing day, the crisis in textile sector is getting worse. The news regarding closure of cotton looms, garments factories and sizing factories were circulating in the market and as a result the crisis can deepens further. Financial crunch is increasing in the market due to lack of business.
However, the cotton yarn market is also at a standstill. Spinners have sold cotton yarn in a large quantity on credit. There was almost no import, as a result of which there is a severe financial crisis and payments are becoming extremely difficult.
The situation of PC yarn is also not much different. In this situation according to All Pakistan Textile Mills Association (APTMA) doing business is almost difficult.
On the other hand, the economic and political situation of the country has already gone worse. Higher sales tax rates, energy crisis and news of further interest rate hikes will increase the crisis.
However, the government has taken timely positive steps to increase the production of cotton for the next season, due to which the production of cotton is expected to increase. The production target of cotton for the next season has been set at 12.77 million bales. The NFSR has also recommended procurement of 10 lac bales through TCP to keep the intervention price stable and has asked for the formation of a Cotton Price Review Committee (CPRC) to monitor it, which is a welcoming sign.
In the province of Sindh, the price of cotton has further decreased to Rs 17,000 to Rs 18,500 per maund. The rate of Phutti, which is available in small quantity, is in between Rs 5,500 to Rs 8,300 per 40 kg.
The price of cotton in Punjab is in between Rs 17,500 to Rs 18,500 per maund while the rate of Phutti is in between Rs 6,000 to Rs 8,700 per 40 kg. There is a decrease in demand and prices of Banola, Khal and oil.
The Spot Rate Committee of the Karachi Cotton Association decreased the spot rate by Rs 300 per maund and closed it at Rs 18,700 per maund.
Chairman Karachi Cotton Brokers Forum Naseem Usman has said that a bearish trend prevails in international cotton market due to recession. The rate of Future Trading of cotton after decreasing is in between 76 American cents to 80 American cents per pound
According to USDA’s weekly export and sales report for the year 2022-23, as many as three lac, ten thousand and two hundred bales were sold. Vietnam was at the top by purchasing one lac, fifteen thousand and three hundred bales. China bought ninety five thousand and nine hundred bales and came second. Bangladesh bought 30,000 bales and came third. Turkey bought twenty five thousand and one hundred bales and stood at the fourth place. Pakistan bought 15700 bales and ranked fifth.
Twenty one thousand and three hundred bales were sold for the year 2023-24. Guatemala topped the list by purchasing 9,600 bales.
Japan bought 5,300 bales and came second. Pakistan bought 4,400 bales and stood at the third position. Vietnam bought 1,300 bales and ranked fourth. Peru was at fifth with 700 bales.
As the government failed to solve the economic problems including the issues of the industry it is feared that around seven million workforce of the industry is being affected due to the closure of industries or decrease in their productivity. Out of these affected workers, four million are the textile workers. This was disclosed by Mohammad Javed Balwani, Coordinator Value Added Textile Forum during a meeting with the representatives of the value-added sector at PHMA House.
Recently, a seminar was organized by Frontier Corps Kalat Scouts, Pak Army 33-Division Khuzdar in Balochistan University of Engineering and Technology, Khuzdar on better production of cotton. It was attended by renowned agronomists from across the country, along with DGs of Balochistan Agriculture Department and Agriculture Extension, representatives of WWF and various fertilizer companies, Vinod Kumar from PCGA, Khizr from LDC, and Zaheer Babar from Surti Textile. It was also attended by Chairman Pakistan Cotton Brokers Association Chairman Major Muhammad Kashif Islam (retd) and Adil Naseem. Local farmers’ organizations, representatives of large landowners and focal persons of various agricultural institutions were also present.
In this seminar, the farmers were informed about the methods of better production of cotton, while the agricultural experts informed in detail about the development of the agriculture sector and its problems and difficulties.
Speaking on this occasion, Colonel Hafiz Kashif Rashid, Commandant of Frontier Corps Kalat Scouts, said that the livelihood of most of the people of Balochistan depends on the agriculture sector. The weather is also very moderate, but due to the lack of information regarding modern requirements, the farmers are completely deprived of the fruits of their years of hard work.
He said that there is no doubt that economic development is closely linked with agriculture development adding that with agriculture development economic development is not possible. The province will be prosperous with the economic prosperity of the farmer.
Director General Agriculture Engineering Water Management Bashir Ahmad Agha and Director General Agriculture Research Inamullah said that Balochistan province has been blessed by Allah, the Almighty with fertile land, moderate climate and hardworking people.
The speakers told the participants about the benefits of growing organic cotton with the advice of certified agronomists to get the best results. Apart from this, they were told about the various schemes of the Balochistan government which have been started for the farmers.
Chairman of Pakistan Cotton Brokers Association Major Muhammad Kashif Islam (retd) thanked the farmers of Khuzdar that despite adverse conditions, Balochistan is producing good quality cotton. He also said despite so much potential here, the process of progress is slow.
In Balochistan, if the coordination of agricultural institutions and LEAs gets better and these institutions take ownership of cotton, then this province can produce a crop which can full fill the demands of the whole country.
The objective conditions here are different from the rest of Pakistan. At the same time, if the basic needs like farm-to-market roads, electricity and cheap agricultural inputs are provided and awareness campaign for better management of water launched the farmers and their families will be highly benefited.
The production deficiency of cotton in Sindh and Punjab can be met from Balochistan instead of imported cotton, where improvement in both quantity and quality is possible.
Chairman PCBA stressed on the smoothness and quality control in the transportation of cotton. He said that it is possible to obtain cotton/ lint from grade III to grade 1 very easily from here. He requested the ginners of Balochistan that once again the cotton grading system is being revived with the cooperation of PCBA, PCGA and PCSI. He said these bodies should involve volunteer ginners so that they can get good price for their PCSI certified graded cotton. PCBA will try to market this certified cotton seed. This will also be beneficial for the farmers.
Moreover, if focused on zoning of cotton at this stage, it will be more beneficial and it can also be easily implemented at this stage.
Talking about cotton seed, the chairman said that because Pakistani agricultural scientists have failed miserably, whatever the reason may be, money is not available for R&D, time is not available, there are no qualified agricultural scientists and the government is not paying attention.
He suggested that in order to deal with this situation, the private sector should be allowed to import cotton seeds like the seeds of other crops. In this way an environment of healthy competition can be created and better quality and quantity of cotton crop can be introduced in Pakistan, as well.
It was also suggested that such seminars should be held frequently. At the same time, increasing production of cotton in Balochistan is a game changer which will play a big role in the economy of Pakistan. The whole of Pakistan should know about this factor. It can only be possible with better communication.
However, the absence of representatives of APTMA and KCA in the seminar was strongly felt.
Lastly, it was suggested that if the Khuzdar industrial area can be revived, a lot of foreign industrial investment could come here. There is lot of potential in this area and communication is easy because of road network. The law and order situation will be improved as the employment rate increases.
There are lot of opportunities for other big textile groups such Surti Textiles, Artistic Group, Safire and Gul Ahmed to invest in Balochistan. In this regard PCBA is ready to solve the problems faced by the industry.
However, addressing the annual meeting of the Agricultural Research Committee of Pakistan Central Cotton Committee PCCC in CCRI, Cotton Commissioner Dr Zahid Mehmood said that the Ministry of National Food Security is implementing the plan for the rehabilitation and development of cotton and its promotion. Dr. Taswur Hussain Malik said that the public and private sectors have to make a joint effort to deal with the changing weather conditions and other challenges faced by cotton crop.
Copyright Business Recorder, 2023
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