KARACHI: Cotton prices continued to rise during previous week. There was an increase in spot rate by Rs.300 per maund. The production of cotton was twenty lac and fifteen thousand bales. Up to August 31, the production is expected to be 12.6 lac bales, 82% more than the same period of last year which was about 28 lac bales.
Total production is expected to exceed 1 crore bales. However, the textile sector is badly affected due to gas shutdown. There is about 14.44% decline in textile exports. Measures should be taken to make the export industry profitable.
In the domestic cotton market, cotton prices continued to rise, besides the trading volume also increased during the past week due to interest in buying of cotton by textile spinners, as well as, increase in buying by cotton ginners.
There are many factors which are responsible for this factor which including relative decrease in the supply of cotton, increase in the price of cotton and higher rate of the US dollar.
On the other hand, a continuous increase in energy prices increased the difficulties and problems of textile industry besides many other sectors.
Especially the huge increase in the interest rate, tariffs of electricity and gas and especially reduced supply of gas is badly affecting the industry. The cost of doing business has also increased due to the increase in cost of petrol and diesel.
However, the news of the appointment of Gohar Ijaz Patron in Chief All Pakistan Textile Mills Association as the minister for industry and textile is a welcoming development especially for the textile sector.
Gohar Ejaz said in a TV interview the other day that export industries especially textile sector will not need subsidies for energy. He said that he had a clear economic plan for this. Now as an opportunity is given to him, he will try to solve the energy problem by implementing the proposed plan.
The price of cotton in Sindh province is in between Rs 18,000 to Rs 18,300 per maund. The price of Phutti per 40 kg is in between Rs 7,300 to Rs 8,400. The rate of cotton in Punjab is in between Rs 18,300 to Rs 18,7000 per maund while the rate of Phutti is in between Rs 7,200 to Rs 8,600 per 40 kg. The rate of cotton in Balochistan is in between Rs 18,100 to Rs 18,300 per maund and the rate of Phutti is in between Rs 7,400 to Rs 8,500 per 40 kg. The rate of Khal, Banola and oil; however, remained stable.
The Spot Rate Committee of the Karachi Cotton Association increased the spot rate by Rs 300 per maund and closed it at Rs 18,300 per maund.
Naseem Usman, chairman of Karachi Cotton Brokers, said that there was a decline in the price of cotton in the international cotton market. The rate of Future Trading after fluctuation was around 83.62 American cents.
According to USDA’s weekly export and sales report, one lac eighty six thousand and three hundred bales were sold for the year 2023-24.
China was at the top by buying one lac and thirty eight thousand and four hundred bales. Turkey bought 13,200 bales and came second. El Salvador was third with 10,500 bales.
Exports of the country’s textile group, during the first month (July) of the current fiscal year 2023-24, declined by about 11.44percent on annual basis to $1.311 billion as against $1.481 billion.
The new government should take immediate steps to make the export industry viable and profitable. The reason for the unemployment of millions of people associated with the textile industry is that the problems of the industry are not being solved in time.
If the supply of expensive electricity and gas to the national textile industry and the export sector continues, Pakistan’s textile exports will decrease due to being expensive compared to textiles of Bangladesh, Sri Lanka and India.
These views were expressed by Muhammad Javed Balwani, chairman of Pakistan Apparel Forum, while giving an interview after a liaison with the officials of textile/ garments, bedwear and related organizations which are part of the forum.
He said that due to any uncertain economic situation in Pakistan, the confidence of domestic and foreign investors is immediately shaken, but it takes years to recover.
However, Syed Usman Ali, chairman of South Circle of Towel Manufacturers Association of Pakistan, has expressed serious concern about the two-day weekly gas supply cut off to export units in Sindh and Balochistan.
SSGCL on a weekly basis has announced a two-day gas shutdown for all industrial units and captive power plants in Karachi and this gas shutdown has deepened the woes of exporters in Pakistan’s economic hub.
Gas outages, particularly, adversely affect the manufacturing process of textile export-oriented units.
Cotton arrival in Pakistan witnessed a significant increase of 48% on August 15 compared to August 1, as per the latest fortnightly data released by the Pakistan Cotton Ginner’s Association (PCGA) on Friday.
Total cotton arrival in Pakistan rose to 2.12 million bales as of August 15 compared to 1.43 million bales recorded on August 1, 2023, an increase of 0.69million bales.
A year-on-year comparison was not available, as data was not collected on August 1, 2022, said PCGA.
Last year, flash floods in Pakistan devastated large swathes of agricultural land in the country, especially in Sindh and Balochistan.
The improvement in cotton arrivals, an essential raw material for the textile sector, is a welcome development for cash-strapped Pakistan.
As per the PCGA data, cotton arrival reported a substantial increase from Punjab.
As of August 15, cotton arrival in Punjab clocked in at 0.64 million bales as compared to 0.39 million bales reported on August 01, 2023, an increase of 64%.
Similarly, cotton arrival in Sindh was 1.48 million bales compared to 1.04 million bales recorded in August 1, an increase of 0.44 million bales or 42%.
However, Chairman of Karachi Cotton Brokers Forum Naseem Usman, making an interesting comparison of cotton production, said that till August 31 last year cotton production in the country was 15 lakh 39 thousand 710 bales, now till August 15 cotton production was 21 lakh 15 thousand and 4333 bales then this years cotton production is five lac seventy five thousand and 723 bales more than the last years production of cotton.
If the production for 16 days in the month of August is assumed to be about 7 lakh bales, then the production will be about 28 lakh bales.
According to this calculation, the production of cotton in the country till August 31 will be 82% more than the production on August 31 of last year by about 12.50 lac bales. If the weather conditions are favourable, the total production can exceed one crore bales.
Copyright Business Recorder, 2023
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