Firm trend amid subdued business on cotton market

LAHORE: Spot Rate was unchanged amid low trading activity on the cotton market on Friday.

Cotton Analyst Naseem Usman while talking to Business Recorder said that price of Punjab’s Phutti attracted per 40 kilograms prices from Rs 7000 to Rs 8600. Cotton of Sindh was traded from Rs 15500 to Rs 20,000 per maund, Punjab’s cotton was traded from Rs 16500 to Rs 20,000 per maund.

He told that 600 bales of Khan Pur were sold at Rs 20, 000 per maund, 600 bales of Dharan Wala were sold at Rs 18150 to Rs 19300 per maund, 600 bales of Pano Aqil were sold at Rs 18300 per maund and 800 bales of Fort Abbas were sold at Rs 17700 per maund.

Khawaja M Zubair, Chairman, The Karachi Cotton Association, has expressed his extreme concern over the low gas pressure and closure of gas supply to the EOS - “export-oriented sector” of Sindh and Balochistan, which are contributing more than 52 percent in total textile exports of Pakistan.

He observed that due to extremely low gas pressure and frequent unavailability of gas supply to the EOS located in Sindh and Hub area of Balochistan, it has become very difficult to run the industry.

He also observed that despite the Government’s intention to facilitate the EOS with a view to boost exports and earn valuable foreign exchange for the country, they are not being provided full and uninterrupted supply of gas resulting in the EOS of the above referred two provinces are unable to achieve their production target and fulfil their export commitments due to which their foreign buyers might likely to divert their orders to other countries.

With a view to save the EOS of Sindh and Balochistan from total closure, Khawaja M Zubair, Chairman, the KCA urges upon the Government to immediately intervene in this serious issue of national interest and issue directive to the gas supply companies to provide gas first to the EOS including textile industry enabling them to meet their production target, fulfil their export commitments without any disruption and continue to play their important role in the growth of country’s economy.

The All Pakistan Textile Mills Association (Aptma) has urged Prime Minister Imran Khan to intervene and save the export-oriented textile industry of Sindh and Balochistan from total closure.

The export-oriented textile industries of two provinces, ie, Sindh and Balochistan have become almost standstill due to gas shortage.

Asif Inam, Chairman Aptma Southern Zone has said that export oriented textile industries of Sind and Baluchistan are contributing more than 52 percent in total textile exports of Pakistan are deprived of gas supply despite the government vision of the higher priority of gas supply to export-oriented industries as compared to other industries. He further said that industries of Sindh and Balochistan are denied their legal right on gas supply although they are self-sufficient in supply of natural gas.

He said that due to extremely low gas pressure and frequent unavailability it is very difficult for the export-oriented textile industries located in Sindh and Hub Industrial Area to run the mills and fulfil their export commitments well in time.

Chairman Aptma Southern Zone said that despite Balochistan High Court Order, industrial units located in the Hub Industrial Area since last two months are getting only 25 percent gas pressure which is inadequate to run the industry.

He has urged the government and gas supply companies to provide gas first to export oriented industries including textile to run their mills without any disruption so that they can fulfil their export commitments in time and then to other industries if they have enough gas supply otherwise the export-oriented textile industry would be compelled to shut down their industries as they are incurring heavy financial losses due to unavailability of gas.

Asif Inam has also requested Prime Minister Imran Khan to intervene and resolve the gas issue so that industries can continue their operation.

Meanwhile, after having set new LOC highs for 4 of the past 5 sessions, cotton prices retreated on Thursday. The trade day initially worked higher, with May and July each setting new highs before the pullback. At the bell, prices were 44 to 108 points in the red. For New crop, Thursday’s session ended mostly weaker, with March ’23 a point in the black.

Chinese Zhengzhou Cotton Prices are also rallying, though the front month is still 155 yuan under the October high. The March contract was 22,175 yuan/MT on 1/19 ($1.586/lb). The online cotton trading platform, The Seam, reported 48,197 bales were sold for an average 116.99 cents/lb on 1/19.

The Daily Spot Quotations report from USDA listed 48,413 bales sold. The Cotlook A index was 145 points stronger on 1/19 to 134.55 cents. The FAS updated the adjusted world price for cotton to 110.44 cents. That was a 4.86 cent bump and is good through next Thursday.

Moreover, ICE cotton futures retreated on Thursday after a strong rally in the previous session, as investors prepared for a weekly federal export sales report.

The March contract on ICE futures was down 1.57 cent, or 1.3%, at 122.38 cents per pound by 12:58 p.m. ET (1758 GMT), easing off a contract high of 124.78 cents hit on Wednesday as the natural fiber latched on to a rally across commodities markets.

The downward move is just a small pullback in cotton prices that was long overdue as the prices have gone so much higher, so quickly, said Louis Barbera, partner and analyst at VLM Commodities Ltd. The US Department of Agriculture (USDA) is scheduled to issue its weekly report at 7:30 a.m. CST (1330 GMT) on Friday.

The Spot Rate remained unchanged at Rs 19300 per maund. Polyester Fiber was available at Rs 260 per kg.

Copyright Business Recorder, 2022