Cotton crop affected by rain and trading volume remains low. The rate of cotton increased in Punjab. September is detrimental for cotton crop. Federal Board of Revenue Assures to collect 10 % sales tax directly from textile mills and imposition of 1% With Holding Tax. In the local market during the last week due to rains business activity fails to gain momentum in majority areas of the country. The torrential rains and winds affected the cotton crop especially in Sindh. The estimate of the loss cause by rains will be determined in few days as there is a forecast of more rains in coming days.
The threat of attacks of virus and germs on crops increase due to rains. Farmers should be cautious regarding this. The officials of agriculture department gave directions to the farmers regarding adopting precautionary measures to save the crop from the attack of virus. In Punjab cotton crop was also affected by rains and the quality is much affected but there is no information regarding loss of crop. Due to releasing of water by India in river Satluj some area of river belt is affected. In Punjab six to seven lac bales of cotton is produced in the area of river belt.
In the first two, three days of the week increasing trend was seen in the trading volume but due to rains business was affected. The price of cotton in Sindh is in between Rs 7700 to Rs 7900 per maund while the price of Phutti is in between Rs 3400 to Rs 3700 per 40 kg. In Punjab the price of cotton is in between Rs 8200 to Rs 8500 per maund while the rate of Phutti is in between Rs 3300 to 3800 per 40 kg. The downward trend was seen in the prices of Banola due to rains. In Balochistan the price of cotton is in between Rs 7800 to Rs 8000 per maund while the price of Phutti is in between Rs 3500 to Rs 3700 per 40 kg.
The Spot Rate Committee of Karachi Cotton Association has stabled the rate of cotton at Rs 8000 per maund. Chairman Karachi Cotton Brokers Forum told that sowing of cotton partially starts in the month of May and continue till month of August. Crop is irrigated by canal water but the Monson started in the months of August and September. The rains damaged the crops. Farmers considered September as detrimental for cotton crop because the Monson continue till September. If there are low rains in September the chances of virus attack is same. The crop affected due to rains and this year same is happened.
The sowing of cotton was affected in Umer Kot due to extreme hot weather while the cotton crop in Sanghar was also affected due to two consecutive spells of rains which is the biggest producer of cotton in the country. Sanghar produces 13 to 14 lac bales but the second spell of rains and winds has affected the quality of cotton. While in Hyderabad and Mirpurkhas the crop was affected due to torrential rains. The crop was ready but due to the event of Hindu community the women were not available for plucking. The delay in plucking and torrential rain damaged the crop. Moreover ginners and traders had stopped buying due to which the farmers slow down the plucking as a result Phutti in the fields were damaged due to rains.
Naseem Usman told that over all mixed trend was seen in international market. After the increase in the rate of cotton in America the weekly report of USDA shows bearish trend because of decrease in export as compared to last week. The prices of cotton remained stable in China but the bearish trend was seen in India. The China and America trade conflict is not only affecting the trade activities of these countries but the trade activities of many countries are affected due to their conflict. The rate of New York Cotton witnessed 20 percent decrease. It is expected that intensity of the conflict will be decreased after the talks started between the representatives of two countries.
Local textile sector witnessed bearish trend. Trading volume is low as well as financial crunch is increasing. On the other hand FBR has imposed 17 percent sales tax on textile sector after abolishing zero rated status in the budget. This has increased the problems of business man especially the cotton ginners are under pressure because FBR has imposed 10 percent sales tax on cotton which will be collected by ginners. The ginners are protesting against this decision. Moreover, the rate of withholding tax increased from 1 percent to 4.5 percent due to which ginners are under pressure.
Chairman Pakistan Cotton Ginners Association Mian Mahmood Ahmad has talked to Chairman FBR Shabbar Zaidi, PM advisor on Commerce, textile, industries and production Abdul Razak Dawood and Jahangir Tareen in this regard. They assured him that they will solve the problems of the ginners but there is no official announcement came up till now in this regard.
Experts were of the view that they can't say anything about the production of cotton before time because the rains has caused damaged to the crop. However, before rains according to the estimates of private sector one crore 20 to 25 lac cotton bales will be produced.
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