KARACHI: Significant rise in cotton prices. The price surged to about Rs 2000, with an increase in the spot rate by Rs 1300 per maund. Business volume is also on the rise, but total production is expected to be barely 85 lac bales. Quality cotton is becoming limited.
Due to the significant rise in prices, some spinners have entered into contracts to import cotton. The government is planning to provide electricity at 9 cents for exports, industries and textile sector. Textile industry is interested in Heimtextil 2024 and 272 Pakistani companies will participate in it.
During the first week of the new year in the domestic cotton market, there was an upward trend in the price of cotton due to interest in purchasing quality cotton by textile mills. As a result, the price of cotton recorded an increase of Rs 1,500 to Rs 2,000 per maund. The business volume was better than before.
Actually, the data on cotton production in the country has been released by the Pakistan Cotton Growers Association until December 31, amounting to 81 lakh seventy thousand bales, which is 77% more than last year. It is believed that by the end of the season, total production will only reach around 85 lac bales.
While the government’s first estimate was 1 crore 27 lac 70 thousand bales, later it was reduced, and the revised estimate was 1 crore 11 lac bales.
However, it is expected that 26 lac bales less will be produced from this estimate due to which the local textile mills will require about 40 lac bales to meet the requirement, of which about 16 lac bales of last year’s still not imported.
About 8 lac bales will be imported from Afghanistan. However, another 8 to 10 lac bales will still need to be imported, according to the import agent. Some mills have begun showing interest in imported cotton, and inquiries for cotton yarn have also commenced. It is reported.
The best news for the textile sector is that the government is ready to provide electricity to them at 9 cents. In this regard, the initial work has been completed. Along with the increase in exports, there will be a significant increase in industrial activities in the country, which will have a positive impact on the cotton market.
According to the quality of cotton in Sindh province, the price of cotton is 17,500 to 20,000 rupees per maund, and the price of Phutti per 40 kg is 7,000 to 8,200 rupees. In Punjab, the price of cotton is 17,800 to 20,000 rupees per maund. The price of Phutti is in between Rs 7,200 to Rs 8,200 per 40 kg.
The price of cotton in Balochistan ranged from 17,000 to 18,000 rupees per maund.
There is an increasing trend in the price of Banola, khal, and oil.
The Spot Rate Committee of the Karachi Cotton Association increased the spot rate by Rs 13,00 per maund and closed it at Rs 18,600 per maund. Karachi Cotton Brokers Forum Chairman Naseem Usman said that the international cotton price remained stable overall. The rate of Future Trading of New York cotton stood at 81 US cents per pound.
According to the USDA’s weekly export and sales report, 131,100 bales were sold for the year 2023-24.China was at the top by buying 50,700 bales. Vietnam was second with 31,800 bales. Pakistan bought 25,600 bales and stood at the third position.
Meanwhile, the caretaker government has drawn up a plan to boost economic activity and increase exports. They propose to reduce the electricity tariff for industries from the current 16 cents per unit to 9 cents, according to sources in the SIFC. The caretaker government has agreed to implement this reduction in the electricity tariff for industries and has prepared a proposal for the same.
In addition, the caretaker Minister of Commerce, Dr Gohar Ijaz, has said that the increase in exports in December 2023 and the trade deficit has decreased significantly. Exports increased by 22.2 percent to $2.812 billion US dollars in December 2023, which was $2.301 billion US dollars in December 2022. Very soon, exports will be increased to $3 billion per month, while the next target is to reach $8 billion per month. The federal minister of Commerce has said that Pakistan’s exports are continuing to increase. Export targets will be achieved through the new industrial policy under the Special Investment Facilitation Council (SIFC).
Moreover, a total of 272 Pakistani firms are participating in Heimtextil 2024, of which 74 companies belong to the towel sector and are members of the Towel Manufacturers Association of Pakistan. Senior Vice Chairman Syed Usman Ali appreciated the positive efforts of the country’s exporters, along with prominent exporters of the Towel Manufacturers Association, stating that a large number of exporters are participating in Heimtextil 2024, which will be held from 9 to 12 January 2024 in Germany. The exporters of this country are striving hard to revive our country’s economy and earn valuable foreign exchange for the national exchequer, as well as to collect taxes, create employment opportunities, and contribute to socio-economic development.
Syed Usman Ali, Vice Chairman of the association, urged that the government should come forward and solve the problems of the exporters on top priority. He said that we have no alternative solution to run our economy except to focus on increasing exports, and no country’s exports can increase without pro-exporter policies.
Export-oriented sectors are facing many serious problems that need to be solved urgently. Otherwise, our exports may further decline, which will be very detrimental to the country. We should work together for the development of our economy, especially the export sectors of Pakistan.
Copyright Business Recorder, 2024
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