LAHORE: The local cotton market on Thursday remained steady and the trading volume remained low. The Spot rate remained unchanged.
Cotton Analyst Nasseem Usman while talking to Business Recorder said that price of Punjab’s Phutti attracted per 40 kilograms prices from Rs 6500 to Rs 8900. 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 also told that 400 bales of Sadiqabad, 400 bales of Adil Pur, 1000 bales of Mir Pur Mathelo were sold at Rs 20,000 per maund and 700 bales of Rahim Yar Khan were sold at Rs 21000 per maund (conditioner).
In a bid to boost the sector, the State Bank of Pakistan (SBP) has enhanced the indicative credit limits for agriculture financing by banks to farmers to align the amount of advances with agriculture input requirements.
The SBP said on Wednesday that the enhanced indicative credit limits for production and development loans of farm and non-farm sector will directly benefit agriculture borrowers, who will now be able to obtain more credit from banks and, in turn, enhance agriculture productivity through adequate use of inputs.
“This will also enable banks to align the loan amounts with the actual requirements of farmers and resultantly, enhance the flow of agriculture credit,” said SBP in a statement.
The credit requirements are the actual demand of the farmers or agriculture business entrepreneurs for agricultural financing. The SBP calculated the credit requirements based on various factors like; land holding, size of farms, economic conditions and expected prices of the agriculture produce.
“Generally, farmers having medium to large farm size are in a good financial position and may have relatively low credit demand while the subsistence and marginalised farmers mainly rely on credit/loans to meet their financial requirements which varies from 90 to 100%,” the central bank said in its report.
SBP said that the per-acre indicative credit limits for crops, orchards, forest trees and agriculture-related infrastructure are based on technical data received from leading agricultural research institutes and other stakeholders.
As per revised credit limits provided by SBP, the per-acre indicative agriculture credit limits for major crops has increased Rs45,000 to Rs70,000 for rice, for wheat, the credit limit has been revised to Rs60,000 per acre from Rs40,000 per acre.
For cotton, the credit limit has been raised to Rs75,000 per acre from Rs52,000 per acre, Sugarcane credit limit revised from Rs73,000 per acre to Rs105,000 per acre, whereas, for maize (Hybrid) the credit limit has increased from Rs55,000 per acre to Rs78,000 per acre, while for maize the credit limit has been raised to Rs65,000 per acre from Rs45,000 per acre.
It is important to note that the indicative credit limits serve as a guideline for banks to assess the credit requirements of agriculture borrowers while sanctioning credit limits. “Banks may, however, make adjustments on the basis of prevailing market conditions, local prices of inputs, and repayment capacity of borrowers,” the SBP said.
The central bank added that revised indicative credit limits will also facilitate provincial planning departments in estimating the total financial and credit requirements of respective provinces/regions for farm and non-farm sectors.
Moreover, Prime Minister Advisor on Commerce and Investment, Abdul Razak Dawood said on Wednesday that key challenge for the government is to sustain growth in exports.
Addressing a press conference, he stated that the Cabinet has approved Textile and Apparel Policy 2020-25, aimed at consolidating the growth already achieved in the textile sector. The policy, which was already being implemented, will be in full swing now.
The salient features of policy are to maintain regionally competitive energy rates throughout the policy period, which will be reviewed each year at the time of budget exercise.
Dawood said, phenomenal growth is currently being witnessed in the textile sector, adding that textile exports would touch $ 21 billion during the current fiscal year as compared to $ 15 billion last year which implies a growth of $ 6 billion in one year.
Dawood did not give details of subsidy given to textile sector during the last three years. The share of textile sector is about 60 percent in total exports. He said industry is cross-subsidizing domestic consumers.
To a question, he said Pakistan has discussed different proposals during his recent visit to China as a member of Prime Minister’s entourage and the outcome of Pakistan’s request will be seen in the next few months. “I am asked every time what China has promised to give. We have put our proposals before the Chinese leadership. We hope China will consider our request, impact of which would be meagre in China’s overall imports but would be reasonable for Pakistan,” he added.
He maintained that Chinese industry is expected to be relocated in Pakistan due to the ongoing war of words between the United States (US) and China.
Dawood maintained that the main challenge for the government is to sustain already achieved growth pace, adding that Pakistan has to go for value addition and diversification. He was of the view that the country has to move from textile to other sectors.
Commerce Advisor said that Pakistan’s biggest weakness is that its 75 percent exports are going to only ten countries and share of textile sector is not up to expectations. Textile constitutes 15 per cent of tariff lines.
He said, in low value added item, cotton yarn, Pakistan’s position is fifth in international market, fabrics is number two and cotton cloth also number two.
“We have to move away from textile sector to other sectors,” he said adding that improvement in textile exports implies that quality of Pakistan’s products is also improved.
The Spot Rate remained unchanged at Rs 20,200 per maund. Polyester Fiber was available at Rs 268 per kg.
Copyright Business Recorder, 2022
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