KARACHI: The rates of cotton remained stable, overall. The production of cotton has increased by 2.2 million bales. It is expected that 7.5 million bales will be produced while around 8 million bales will be imported. Up till now import agreements of 4.7 million bales have been signed. All Pakistan Textile Mills Association (APTMA) has protested against gas curtailment in Punjab. The government has announced much awaited five-year textile policy. Cotton production will be effected due to sales tax on cotton seed.
The rate of quality cotton in local cotton market remained stable due to the cautious buying by the textile and spinning mills and due to the continuous selling by the ginners.
The availability of quality cotton is going to be limited day by day. Only quality cotton is available with one international commodity organisation which is selling cotton off and on due to which the trading volume remained low.
However, trading is going on in the market as per quality although the volume of trading is low. The arrival of imported cotton is also increasing. On the other hand increasing trend in the rate of US dollar continues due to which the rate of imported cotton is increasing. The exporters are getting good price of their products but the problem of shipments and containers is still there but the situation is now better as compared to the past. The financial crunch has increased due to the last days of December. Many mills are facing the issues of payment.
According to the market sources it is expected that rate of cotton will increase in January but the industry and textile sector is facing energy crisis due to which the production is affected. The production of cotton is 60 per cent less as compared to the needs of the country. The stock of cotton available with the ginners will be finished in January, after that it is expected that there will be a cotton crisis in the country. The rates of cotton in international markets overall remained stable.
The rate of cotton in Sindh as per quality is in between Rs 14500 to Rs 17500 per maund. The rate of Phutti which is available in limited quantity is in between Rs 5500 to Rs 7000 per 40 kg. The rate of Banola is in between Rs 1450 to Rs 2300 per maund. The rate of cotton in Punjab is in between Rs 14500 to Rs 16800 per maund. The rate of Phutti is in between Rs 5800 to Rs 7800 per 40 kg.
The cotton and Phutti in Balochistan is almost near ending while Phutti which is available in some areas in limited amount in between Rs 6500 to Rs 8200 per 40 kg. The Spot Rate Committee of the Karachi Cotton Association has increased the spot rate by Rs 100 per maund and closed it at Rs 16800 per maund.
Chairman Karachi Cotton Brokers Forum Naseem Usman told that rates of cotton overall remained stable worldwide. The Rate of Promise (Waday Ka Bhao) of New York Cotton remained in between 106 to 108 American cents per pound.
According to the USDA weekly export and selling report two lac eighty six thousand bales were sold which is 25 percent less as compared to last week. This year too China was number one with one lac seventeen thousand bales and Pakistan was on number two with fifty two thousand and two hundred bales. The rates of cotton in Brazil, central Asia, Africa and Australia and India remained stable.
Separately, Executive Director & Secretary General of All Pakistan Textile Mills Association (APTMA) Shahid Sattar Thursday urged Prime Minster Imran Khan to put on hold the decision of suspending gas supply to mills in Punjab while providing APTMA a time to plead the Punjab industry case.
In a letter to Prime Minister, APTMA has sought an urgent appointment on a matter of grave concern and to discuss the issue of gas supply to the export sector of Punjab that has been disconnected.
He said the Ministry of Energy had assured the Punjab export sector of continued gas supply provided they agreed to increase the price to 9$/MMBTU from 6.5$. APTMA agreed to this in the presence of Abdul Razak Dawood. Subsequently, the Ministry of Petroleum presented a Gas Management Plan to the CCOE on 2nd December 2021 which stated that gas to Captive Power Plants whether Co-Gen or not would face load shedding, starting from 15th December.
The Punjab based industry was thereof hit with a double whammy, i.e., increase in gas price, and load shedding from 15th December. Under these circumstances, some member mills went to court on 8th December full 6 days after CCOE and got stay on the basis of discrimination as compared to other provinces.
He said that the discrimination is not only in price but also in gas load shedding which is restricted to Punjab only. He said 70% of the textile industry is based in Punjab, and the suspension of gas will bring 80% of the industry to a complete halt. This will have an extremely negative impact on exports and will bring to an end the extremely positive increase in exports and investment witnessed during the last year.
He said if we are unable to deliver goods on order, orders once lost will be a permanent loss to Pakistan, and extremely difficult if not impossible to reverse. He said that the bulk of our mills are Co-Generation and use gas to produce electricity, as well as, steam and hot water used in process. Even if the additional electricity load could be accommodated the mills cannot generate steam & hot water from electricity.
However, the truth of the matter is that the Discos are not in a position to supply additional power to the mills in any case. He said most of the mills (80%) will not be in a position to operate; the impact on employment would be extremely detrimental. As a consequence, a large number of workers would be laid off in Punjab leading to many social and political consequences.
The country’s textile group exports witnessed 28.41 percent growth during the first five months (July-November) of the current fiscal year and remained $7.758 billion compared to $6.041 billion during the same period of the last fiscal year, says the Pakistan Bureau of Statistics (PBS). The exports and imports data released by the PBS revealed that textile group exports on month-on-month basis witnessed 8.45 percent growth and remained $1.736 billion in November 2021 compared to $1.6 billion in October 2021.
On year-on-year basis, textile group exports witnessed 35.33 percent growth in November 2021, when compared to $1.282 billion in November 2020. Economic Coordination Committee gave approval of the next five year textile policy.
Seed cotton (Phutti) equivalent to over 6.8 million or exactly 7274239 bales have reached ginning factories across the country till December 15, 2021 registering increase of 43.83 percent as compared to corresponding period of last year.
According to a fortnightly report of Pakistan Cotton Ginners Association (PCGA) released on Saturday, over 7.2 million or 7212028 bales have undergone the ginning process, i.e., converted into bales. Cotton arrivals in Punjab were recorded at over 3.7 million or 3773609 bales registering a surplus of 26.68percentage compared to corresponding period of last year when arrivals were recorded 2978878 bales.
Sindh generated over 3.5 million or 35,00,630 bales registering an increase of 68.42 pc as compared to the corresponding period of last year when arrivals were recorded at 20,78,546 bales. Textile mills bought 68,90956 bales while exporters purchased 16,000 bales and Trading Corporation of Pakistan (TCP) did not buy during the cotton season 2021-22.
Sanghar district of Sindh topped with cotton arrival figure of 1317044 bales followed by Bahawalnagar district of Punjab with 1043764 bales. Total 133 ginning factories were operational in the country. Exactly 367283 cotton bales unsold stock was available in the ginning factories.
Chairman Karachi Cotton Brokers Forum Naseem Usman while commenting on the report said that it is expected that 7.5 million bales will be produced in the country adding that if the supply of energy will continue to the textile sector on competitive rates then it is expected that 1.65 million bales will be produced in the country. In this way in order to fulfil the demands of local textile industry it is expected that 8 million bales will be imported while up till now agreements for the import of 4.7 million bales have already been signed.
Naseem Usman also said that spinners are hesitant to sign import agreements of cotton because of increase in the rate of the US dollar. He also told that according to the ginners the stock of cotton will be finished in the ginning factories till January. The farmers of cotton will grow cotton in the next season because they are getting good price.
Meanwhile, chairman Pakistan Cotton Ginners Association Sohail Harl said that imposition of sales tax on cotton seed in the expected budget will effect production of cotton. He demanded that government will abolish sales tax on cotton seed immediately.
Copyright Business Recorder, 2021
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