Weekly Cotton Review: Bullish trend witnessed amid increased trading volume

KARACHI: A bullish trend was witnessed in cotton market during the previous week, with an improvement in trading volume. However, there was fluctuation in the rate of cotton in international cotton markets.

A Chinese company has started experimental sowing of cotton with the help of cotton research institutions. However, increase in the production of cotton is termed the only solution to all the problems faced by the country.

In the local cotton market the prices of cotton increased by Rs 500 to Rs 1,000 per maund due to textile spinners’ interest in buying of quality cotton.

Ginners are demanding a high price for quality cotton. The rate of quality cotton has reached to Rs 21,000 per maund. The rate of the US dollar again started increasing against the Pakistani rupee. All Pakistan Textile Mills Association (APTMA) has been complaining that due to the high rates of gas and electricity doing business is not viable.

However, some big groups are cautiously buying cotton due to the coming Eid holidays as a result of which trading volume is satisfactory.

Cotton sowing is increasing in the cotton producing areas of Lower Sindh. It is expected that partial arrival of new crop cotton will start by the end of May, if the weather conditions remained favourable.

The government has fixed the intervention price of Phutti at Rs 8,500 per 40 kg. This has encouraged the cotton farmers and it is expected that they will be more attracted towards this crop. The government has fixed the first production estimate for cotton crop production for 2023-24 at 1 Crore 21 lac bales.

The rate of cotton in Sindh and Punjab is in between Rs 18,000 to Rs 21,000 per maund while the rate of Phutti is in between Rs 6,500 to Rs 8,500 per 40 kg.

The Spot Rate Committee of the Karachi Cotton Association has increased the spot rate by Rs 2,00 per maund and closed it at Rs 19,700 per maund.

Chairman Karachi Cotton Brokers Forum Naseem Usman has said that rate of cotton remained stable in international cotton markets. The rate of Future Trading of cotton of New York Cotton is in between 82 American Cents to 83 American Cents per pound. The rate of cotton in India remained stable after increase in the production of cotton.

According to USDA’s weekly export and sales report, one lac forty three thousand and two hundred bales were sold for the year 2023-23.

China was at the top after buying twenty two thousand and three hundred bales.

Turkey bought eighteen thousand and seven hundred bales and came second.

India stood third by purchasing seven thousand and seven hundred bales.

Eleven thousand and one hundred bales were sold for the year 2023-24. Turkey was at the top by buying eight thousand and eight hundred 800 bales.

Pakistan bought two thousand and three hundred bales and came second.

Head Transfer Technology Central Cotton Research Institute Dr Sajid Mahmood in a statement said unless problems of the concerned departments are not solved progress is not possible.

During the days of Corona, the government provided all kinds of help and facilities to the industry and the industry gave a record business. The economy of the country improved. However, when the industry was neglected, the economy started declining.

Similarly, as long as attention was paid to cotton research institutes, a good production of cotton continued in the country and prosperity and development was seen. Without cotton, the country’s economy can’t grow. Addressing the problems of research institutes is indispensable for increasing cotton production and growth of textile industry.

At present, there is worrisome situation of cotton in Pakistan due to the continuous neglect of Pakistan Central Cotton Committee, the largest federal cotton research organization in Pakistan, due to which the economy of the country is under severe crisis. Unless proper measures are taken for the improvement of backbone of the economy, the intensity of the disease will increase. Pakistan Central Cotton Committee (PCCC) has been facing a serious financial and administrative crisis. The crisis started in 2012 and when the textile industry stopped paying cotton cess to PCCC in 2016 in violation of the Cotton Cess Act.

In 2014, there was a bumper crop of cotton of14.3 million bales, which was about 3 million bales more than the country’s needs, but when the textile industry stopped giving cotton cess to PCCC in 2016, the cotton crop, research institutes and the textile industry in Pakistan went affected.

Today, the situation is that agricultural scientists and employees in PCCC are deprived of salaries and pensions for the last 10 months. There is such a shortage of manpower that one person is doing the work of five employees.

Moreover, Coordinator Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Malik Sohail Talat has said that the salaries of 1100 employees of cotton research institutes should be released before the Eid.

In a statement, he strongly criticized the government for non-payment of salaries of the employees of cotton research institutes for several months and said that cotton is the backbone of Pakistan’s economy.

The textile sector accounts for 62% of Pakistan’s total exports and cotton is its basic raw material. The government has funds for everything but not for these employees who are working day and night in the cotton research institutes.

He said government is paying only 30 percent of their salaries.

He also said National Food Security Minister Tariq Bashir Cheema has always given preference to agriculture and given people-friendly policies. It is not understandable why the employees in his ministries are facing issues.

Copyright Business Recorder, 2023