KARACHI: The local market remained stable on Saturday. Market Sources told that trading volume remained thin. Market Sources told that the rate of cotton is in between Rs 13200 to Rs 13300 per maund.
The rate of new crop of Phutti was in between Rs 5800 to Rs 6000 per 40 kg. The rate of Banola is in between Rs 2000 to Rs 2200 per maund.
Cotton Analyst Naseem Usman told Business Recorder that government has increased GST on raw cotton and ginned cotton from 10 percent to 15 percent. The ginners has rejected this increase and threatened to go on strike if the decision is not withdrawn by the government.
Farmers association and cotton growers Thursday proposed to the government to fix minimum support price (MSP) for cotton in the range of Rs 5,000 to Rs5,500 per maund.
"We have suggested to the government to fix cotton MSP between the range of Rs 5,000 to Rs 5,500 during a meeting presided over by the Federal Minister for National Food Security, Syed Fakhar Imam," said Pakistan Kissan Ittehad (PKI) President Khalid Mehmood Khokhar, while talking to Business Recorder.
He said that if the government fixed cotton MSP below Rs 5,000 per maund then it would not benefit cotton growers because of increase in cost of production of the crop. "Farmers and growers would not accept MSP of cotton less than Rs5000 per maund," he said.
An official said that the meeting was attended by Chairman Trading Cooperation Pakistan (TCP), Managing Director (MD) Pakistan Agricultural Storage and Services Corporation (PASSCO), and the cotton growers.
The value added textile sector has asked for the more relief and concessions to achieve the double digit export growth target and earn over $26 billion foreign exchange in the next fiscal year 2021-2022 (FY22).
Leading exporter and Chairman Pakistan Apparel Forum (PAF), Jawed Bilwani has welcomed the government's announcement of new Uniform Export Facilitation Scheme, however, expressed disappointment on the measurers announced in the budget for the textile sector. "Most of our [textile sector] demands were not considered in the budget," he said.
He said that major demand of value added textile exports associations was restoration of Zero Rating on GST "No Payment No Refund Regime" through revival of SRO 1125 in letter & spirit, but the federal budget is missing this important demand. The revival of zero rating regime will help resolve the liquidity issues of the textile exporters.
Bilwani said that the federal government has allocated some Rs20 billion for the DLTL as against the outstanding dues of Rs32 billion. "We believe that with current budgetary measures, the export is likely to increase 5-6 percent in the next fiscal year," he added.
The federal government has allowed duty import of cotton yarn, which is good news for the textile sector. At the same time, there is need to consider other demands of textile sector including suspension of Export Development Fund surcharge, reduce and fix tariffs of electricity, indigenous gas & RLNG.
Ijaz Khokhar patron-in-chief Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) said that budget measures are insufficient for a significant increase in the country's exports particularly textile exports.
He said that despite the largest export oriented sector, most of the demands of the value added textile were not considered in the federal budget 2022. "Our demand of Zero rating was not accepted, because of which the textile sector will remain faced with liquidity issues due to non-payment or delay of refund claims," he added.
Chairman Pakistan Weaving Mills Association, Yousuf Yaqob said that the budget measures will not ease the liquidity issues of the textile sector as they will have to pay 17 percent sales tax. "Our demand for zero rating or reduction in the sales tax from 17 percent to 5 percent," he said and added that both demands were not considered in the budget.
ICE cotton futures headed for a fourth straight weekly rise on Friday, bolstered by an upbeat US supply and demand report, although the natural fibre eased on the day on a stronger dollar.
Cotton contracts for December fell 0.51 cent, or 0.6percent, to 87.70 cents per lb, by 12:54 pm EDT (1654 GMT), having earlier hit its highest since May 6 at 88.50 cents. For the week, the contract was up 2.1percent.
"Demand for cotton is at record levels (but) the US is going to have a ton of hurdles to overcome in the coming weeks between rains in (the) Delta, south Texas. While it should recover, our yield expectations have to be tempered," said Louis Barbera, partner and analyst at VLM Commodities Ltd.
The US Department of Agriculture in its June supply and demand report raised US export projections, cut US and world ending stock estimates, but kept production unchanged for the 2021/22 crop.
"The only negative factor is the dollar is up and wet weather has moved out of (the) Delta that will allow newly planted cotton to emerge and continue growing," said Rogers Varner, president of Varner Brokerage in Cleveland.
The dollar firmed 0.6percent against rivals, making cotton expensive for other currency holders. Market participants are now awaiting the acreage report at the end of the month for more clarity on the production estimates.
Naseem Usman told that month of June is very critical for cotton sowing. All the stakeholders should motivate farmers so that they can grow cotton.
Rice sowing planting is increasing in district Ghotki, which is legally ban by provincial government.
It has adverse effects on socio-economic and on environment. It will impact the cotton value chain and the soil will become water logged, which directly impacts the gas reservoirs placed at Qadirpur and reduces the pressure when water table becomes up.
The Spot Rate remained unchanged at Rs 12300 per maund. The Polyester Fiber was available at Rs 202 per kg.
Copyright Business Recorder, 2021
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