KARACHI: Cotton prices declined amid very low business. Limited quantity of cotton is available now and arrival of new crop is expected in June.

It is said that the crop is currently satisfactory in the southern regions of Sindh province; however, water scarcity could damage it.

The ongoing wheat crisis has set off alarm bells for cotton farmers. If the government fails to support them, it will exacerbate their difficulties. The government should immediately announce the intervention price for cotton and also take steps to activate Trading Corporation of Pakistan (TCP).

Head Transfer of Technology Department Central Cotton Research Institute Multan Sajid Mahmood has said that the textile sector is slowly sinking like the Titanic. Instead of taking positive action, the government is watching like a silent spectator.

However, delegations from All Pakistan Textile Mills Association (APTMA) and Pakistan Cotton Ginners Association (PCGA) have met and discussed the situation faced by the textile industry. APTMA should take positive steps to increase cotton production.

In the local cotton market, the decline in cotton prices continued last week. Textile mills are showing less interest in buying local cotton, while large groups of mills have signed import contracts for approximately 500,000 bales of cotton from Brazil, America, and others countries for delivery in July and August.

Sources say that the new season’s cotton prices will not see the same boom as they saw last year, as most mills are facing financial difficulties and will make slow purchases.

Ginners will also need to be cautious. There is no good news about cotton production either, as farmers have been facing severe disappointment. After the wheat crisis, the alarm bells are ringing for the cotton crop, as well.

Farmers are in trouble, and according to reports from several areas of Sindh province, paddy is being cultivated in cotton areas.

The area under cotton cultivation in Punjab’s cotton-producing regions this year is reported to be lower than last year. The government has not yet announced the intervention price for cotton, and farmers are demanding that the government announce the intervention price to ensure that cotton farmers are not left at a loss if the market price falls below the intervention price.

The government should also develop a strategy for the TCP to purchase cotton, unlike last year when only announcements were made without fulfilling promises to farmers.

Farmers say that the government deceived wheat farmers by announcing an intervention price and then abandoning them, causing billions of rupees in losses. The farmers are now disillusioned, and the problem of wheat cultivation may arise next year. Considering the wheat crisis, cotton farmers are also worried about their economic future. If cotton production in the country proved insufficient to meet the needs of textile mills, then expensive cotton and edible oil will have to be imported in exchange for precious foreign exchange.

On the other hand, the country’s textile sector is continuously facing a crisis like situation due to high energy prices and higher interest rates. Many mills have been forced to shut down, while others are operating partially. Unemployment and poverty in the country are constantly increasing at an alarming rate. The government is showing no interest in addressing this issue.

In the province of Sindh, a very limited quantity of cotton stock is available, priced between Rs 19,000 to Rs 20,500 per maund. A private company also has a stock of only 25,000 bales, which is being sold daily.

The Spot Rate Committee of the Karachi Cotton Association closed the spot rate at 19,700 rupees per maund.

Chairman of the Karachi Cotton Brokers Forum, Naseem Usman, informed that there are fluctuations in the international cotton prices. The New York cotton futures price, which was at 75 American cents, rose to 80 cents and then closed at 77.31 cents.

According to the USDA’s weekly export report, for the year 2023-24, 2 lakh 53 thousand and seven hundred bales were sold. Pakistan purchased 36,300 bales and ranked first. Vietnam purchased 27,500 bales, ranking second. Turkey purchased 21, 500 bales and ranked third.

For the year 2024-25, 1 lakh 58 thousand and nine hundred bales were sold. Honduras purchased 44,600 bales, and ranked first. South Korea purchased 31,700 bales and ranked second. Mexico purchased 28,500 bales and ranked third. Pakistan purchased 22,000 bales and ranked fourth.

In the recent days, an effective discussion was held between the delegations of APTMA and PCGA at FPCCI regarding the problems facing the cotton business.

Meanwhile, talking to Naseem Usman, Head of the Technology Transfer Centre, Central Cotton Research Institute, Multan, Sajid Mahmood said that India spends 0.6% of its total GDP on research and development, while Pakistan spends only 0.1%. If we talk about cotton, there are 5 or 6 institutions in India working on cotton research and development, which have full support from government and private institutions.

The Indian textile industry not only regularly provides cotton seeds to these research institutions but also upgrades their research laboratories, arranges modern training workshops to enhance the skills of agricultural scientists working there, and provides them with heavy funding.

The Indian textile industry has been bearing the entire cost of the ICAC conference for many years. Indian cotton research institutions have full cooperation with textile industry in liaison with institutions working on cotton research around the world. On the other hand, the role of the textile industry in Pakistan is very disappointing.

The Pakistani industry is not providing cotton seeds to research institutions (a clear violation of the Cotton Cess Act), nor is it providing any facilities to cotton farmers, due to which the cotton research institutions and cotton related business in Pakistan are facing difficulties.

Copyright Business Recorder, 2024

Comments

Comments are closed.