KARACHI: The decline in cotton prices continues, as a decrease of Rs 800 per maund in spot rate was witnessed this week. Due to the impact of the global cotton downturn, the next season’s cotton prices are expected to remain low.
The Federal Committee on Agriculture (FCA) has set a production target of 10.8 million bales of cotton. The textile sector is facing a continuous crisis, which the government seems consistently ignoring.
The Pakistan Business Forum is urging the government to rescue the textile sector from the unbearable crisis. If the support price of cotton is announced immediately, it will encourage farmers and the market will also see positive effects.
The local cotton market witnessed sluggishness during the last week, with trading volume remaining extremely low, while the bearish trend in cotton prices persisted. As a result, the Karachi Cotton Association’s Spot Rate Committee reduced the spot rate by another Rs 800, fixing it at Rs 20,000 per maund. Spinners have barely 45,000 to 50,000 bales of cotton stock left, and a private company has around 50,000 bales for sale. Therefore, only a limited stock of 0.1 million bales of cotton is available for sale in the country.
According to sources, the new crop of cotton for the season 2023-2024 is expected to start arriving by the end of June, although it is said that partial arrivals may begin by the last week of May, but their quantity will be very small. It is hoped that cotton arrivals will start in the country by June, which also depends on weather conditions.
The FCA has set a production target of 10.8 million bales for the 2023-2024 cotton season. However, the government is delaying the announcement of the support price (subsidy) for cotton, which is causing uncertainty among cotton farmers regarding sowing. The government should immediately announce the support price for cotton. Moreover, if the market price of cotton falls below the support price, the Trading Corporation of Pakistan (TCP) should have a strategy in place to start purchasing cotton, as the government failed to do so last year, which eroded the confidence of cotton farmers.
Sources associated with cotton believe that the government is showing negligence towards cotton production, the backbone of the country’s economy, despite its importance.
In the provinces of Sindh and Punjab, the price of cotton is ranging from Rs 19,500 to Rs 21,500 per maund. The Phutti is not available while the prices of Khal, Banola and oil show a downward trend. The Karachi Cotton Association’s Spot Rate Committee has reduced the spot rate by another Rs 800, fixing it at Rs 20,000 per maund.
Karachi Cotton Brokers Forum Chairman Naseem Usman informed that international cotton prices have remained stable. The price of New York cotton futures is trading between 79 and 81 American cents per pound. According to the USDA’s weekly export and sales report, more than one lac and seventy bales were sold for the 2023-24 season. Pakistan purchased 26,800 bales, ranking first, followed by Vietnam with 14,200 bales, and Turkey with 9,700 bales.
For the year 2024-25 season, 65,700 bales were sold. China purchased 22,000 bales, ranking first, followed by Honduras with 12,100 bales, and Turkey with 11,000 bales.
Textile millers have warned the government that it should avoid increasing taxes and energy tariffs during negotiations with the International Monetary Fund (IMF) for another long-term loan plan. As the country is heading towards another IMF loan, the All Pakistan Textile Mills Association (APTMA) has demanded that the government should reduce energy prices and tax rates and formulate export-based policies, enabling the industry to become competitive in the global market.
In a letter written to Finance Minister Muhammad Aurangzeb, textile millers stated that as the country is heading towards another IMF program, fundamental reforms are needed to promote export-based culture in all sectors of the economy.
Moreover, the textile sector is continuously facing a crisis, and according to sources, the Pakistan Business Forum (PBF) held a conference in Faisalabad previous day, which was attended by representatives from the textile sector from all four provinces. It was unanimously agreed upon that the textile sector is facing a severe crisis due to the government’s continuous neglect, resulting in mills closing down gradually, increasing unemployment and poverty, and causing continuous loss to the national economy. Urgent measures are needed to address this situation.
However, in a recent meeting of the Federal Committee on Agriculture, held at the Ministry of National Food Security and Research, production and cultivation targets for Kharif crops 2024-25 were set. Regarding the set production target for cotton, Sajid Mahmoud, Head of the Department of Transfer of Technology, Central Cotton Research Institute Multan said that ensuring timely water availability in cotton-growing areas is crucial for achieving the target of 10.8 million bales. He emphasised that regular planning and necessary measures are essential to achieve this goal.
Mahmoud further stated that where wheat harvesting is complete, cotton cultivation is gaining momentum, while wheat harvesting may take another one to two weeks. Farmers who have completed wheat harvesting should expedite cotton sowing as soon as possible.
Currently, the weather is favourable for cotton, and any delay in sowing may result in reduced production. Moreover, announcing the support price for cotton before the completion of wheat harvesting will encourage farmers and have a positive impact on the market.
He praised the efforts of Secretary Agriculture Punjab Iftikhar Ali Sahu and Secretary Agriculture South Punjab Saqib Ali Atiel for promoting cotton cultivation and working tirelessly for its development.
Additionally, Dr Muhammad Naveed Afzal, Director Central Cotton Research Institute Multan has also started guiding and training cotton farmers through recommendations presented in the CCRI Farmers Advisory Committee meeting regarding cotton cultivation and management.
Copyright Business Recorder, 2024
Comments
Comments are closed.