KARACHI: Extraordinary fluctuation from Rs 15,00 to Rs 2,500 per maund was seen in the rate of cotton. The spot rate was increased by Rs 900 per maund. Due to the high rate of the US dollar and low supply of Phutti, the prices are facing fluctuations.
Moreover, Federal Board of Revenue will introduce track-and-trace system in ginning factories.
Pakistani stakeholders organised an important meeting of Organic Cotton Accelerator (OCA) in Dubai. It is said that 25 lac bales of cotton are yet to be imported from foreign countries. However, due to the unavailability of the US dollar it looks difficult that more deals will be signed.
Experts say that a minor damage to the cotton crop is expected due to floods and pests. In the local cotton market, supply of cotton decreased during the past week. Apart from this, the price of cotton increased drastically due to the increase in the purchase of cotton by the textile spinners and due to the extreme high rate of the US dollar.
The rate of cotton after witnessing an increase of Rs 1,000 to Rs 2,000 per maund later decreased by Rs 5,00 to Rs 1,000 per maund. There was an extraordinary fluctuation in the price of cotton of around Rs15,00 to Rs 25,00 per maund. The rate of per 40 kg Phutti was increased by Rs 7,00 to Rs 8,00. Due to non-viability many ginning factories have partially suspended their operations.
Separately, India has turned the flow of water in the Sutlej River towards Pakistan, due to which the crops are being damaged because of flood situation in many areas. However, there is fear of some loss due to pest attack. The overall situation of the textile sector is not satisfactory.
However, due to the rising value of the US dollar, textile spinners wants to buy cotton while ginners were also running after cotton, which has pushed the price of cotton to a high level of Rs 20,000 per maund and Phutti to Rs 8,200 to Rs 9,300 per 40 kg.
However, after correction in the market on Friday morning, ginners felt panic as a result the rate of Phutti and cotton started decreasing.
The rate of cotton in Sindh after increasing by Rs 8,00 to Rs 1,000 per maund is Rs 19,000. The rate of Phutti per 40 kg after increasing by Rs 6,00 to Rs 7,00 is in between Rs 7,800 to Rs 8,500. The rate of cotton in Punjab is in between Rs 19,500 to Rs 20,000 per maund while the rate of Phutti is in between Rs 7,800 to Rs 9,000 per 40 kg.
The rate of cotton in Balochistan is in between Rs 19,000 to Rs 19,300 per maund and the rate of Phutti is in between Rs 8,000 to Rs 9,300 per 40 kg. The rate of Khal, Banola and oil increased a little bit.
The Spot Rate Committee of the Karachi Cotton Association increased the spot rate by Rs 900 per maund and closed it at Rs 19,200 per maund.
Chairman Karachi Cotton Brokers Forum Naseem Usman said that bullish trend prevails in the international cotton market. The rate of Future Trading of New York Cotton closed at 87.51 American cents.
According to USDA’s weekly export and sales report, 38,900 bales were sold for the year 2023-24. China was at the top by buying 31,700 t bales. Vietnam was second with 10,800 bales. Bangladesh bought 5,100 bales and stood at the third position.
As many as 52,800 bales were sold for the year 2024-25. Malaysia was at the top by purchasing 26,400 bales. Pakistan bought 22,000 bales and came second. Mexico bought 4,400 bales and came third.
The government has decided to implement a track-and-trace system at ginning factories to fully document the cotton trade and ascertain actual production/ sales of the commodity.
The decision was taken during the meeting of Malik Amjad Zubair Tiwana, chairman of the Federal Board of Revenue (FBR), with Dr Gohar Ejaz, the Caretaker Federal Minister for Commerce, Industries, and Production at the Ministry of Commerce.
During the meeting, it was decided that the FBR, in collaboration with federal ministries and provincial departments, will introduce a track-and-trace system at ginning factories in Pakistan to promote transparent cotton trade and ascertain actual production of the cotton.
The FBR has decided to implement the track and trace system on the ginning units for electronic monitoring of production and supplies of cotton. This initiative aims to assist the textiles and apparel industry in meeting the traceability standards set by various trading blocs, nations, brands, and retailers.
In this regard, the Commerce Ministry and the FBR would collaborate to introduce the track-and-trace System for a transparent cotton trade.
Separately, Pakistani stakeholders organised an important meeting of Organic Cotton Accelerator (OCA) in Dubai to discuss how organic cotton can be successfully cultivated in Pakistan keeping in mind the benefits for the farmers. It was also discussed in the meeting that such type of workshops should be held in Pakistan. The participants suggested that such type of workshops and training program should be introduced to farmers in Pakistan and should be made part of the curriculum. It was also discussed that how a premium incentive can help us to introduce Organic cotton in our region.
The company like Artistic Milliners which has started this growing also shared a valuable feedback. It was said that for this purpose we need to have non-GMO plus organic seed banks that can give us a better production because seeds will play a vital role in it.
Many renowned names of the cotton industry attended like. M Adil Naseem Osawala (Naseem Usman & Sons), Hina Adil Osawala (Musab Seed Corporation), Dr Jawed Hassan (APTMA), Dr Khalid (SAWIA), Hafiz Muhammad Bux (WWF), Shahid Saleem (Reeds), Dr Shahid Zia (Lok Sanjh), Khawaja Noman (Control Union). Lubna khalid (IDFL), Saqib Sohail and Imer Ahmed (Artistic Milliners), Asad Soorty (Soorty Ent), Maqbool Baig (Interloop), Asad Bajwa, Hussain Memon, Babar Bajwa (CABI), Usman and Rahol (Inditex) participated in the event hosted by Asif Mehmood, Jyoti Sharma and Ruud Schutta (OCA).
Meanwhile, cotton importers say that import contracts for the year 2022-23 and 2023-24 of cotton from foreign countries of about 25 lac bales of Pakistani weight (155 maunds) have been signed.
This year if the production of the country in the country is one Crore bales, there will be no need of signing new deals of import except for the long fibre cotton because the domestic consumption is expected to be around 1 Crore 25 lac to 30 lac bales. However, US dollar shortage may create difficulties.
Copyright Business Recorder, 2023
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