KARACHI: A good increase of up to Rs 2,000 per maund was witnessed in the price of cotton, and the spot rate also increased by Rs1000 per maund.
Pakistan Cotton Ginners Association has appealed to Chief of Army Staff and Caretaker Chief Minister of Punjab to save the farmers and ginners from loss.
They should give directions to Trading Corporation of Pakistan (TCP) to purchase one million bales of cotton immediately. However, despite the promise, the government is not buying cotton through the TCP.
The meeting of Cotton Crop Assessment Committee is convened every year for correct assessment of cotton production. However, sources said that this year up till now this meeting has not been convened. The total production of cotton is; however, expected to be around 90 lac bales.
Commercial and industrial organisations are protesting against the sudden increase in gas prices. Karachi Chamber of Commerce and Industry has termed the unsustainable hike in gas rates as the last nail in the coffin of the industry.
However, in the local cotton market, the price of cotton saw a significant increase due to the increase in the purchase of quality, as well as, low quality cotton by textile spinners during the last week. The prices witnessed an increase of Rs 15,00 to Rs 2,000 per maund. The spot rate also witnessed an increase of Rs 1,000 per maund. Obviously, the rate of Phutti also increased along with the rate of cotton.
Due to the statements from government side to buy cotton through the TCP at the rate of Rs 8,500 per 40 kg fixed by the government, cotton farmers have became cautious in selling their produce. However, textile spinners have started storing quality cotton due to news of its low availability. Analysts believe that quality cotton prices are unlikely to come down in near future.
There is a recession in demand and prices of cotton yarn and textile products in local and international markets. Payments are also a big issue, especially in the local market due to the financial crisis. According to sources of textile spinners, cotton yarn is barely sold, but they are facing difficulties in payments.
There are still speculations about cotton production in the country. Federal Committee on Agriculture has set a revised cotton target of one Crore and fifteen Lakh bales. While market sources are estimating that cotton production will be around 80 to 90 Lakh bales. Every year a meeting of all stakeholders is called for the assessment of the cotton production but it is surprising why this meeting is being delayed this year.
Apart from this, the long-standing promise of buying Phutti at the price of Rs 8,500 per 40 kg fixed by the government through TCP is not being fulfilled while the farmers have already sold about 80-85% of their Phutti.
In the last few days, two caretaker ministers of Punjab province complained to the government in a press conference that the federal government is delaying the purchase of cotton through the TCP. It is not clear what is behind this.
The rate of cotton in Sindh is in between Rs 15,000 to Rs 18,800 per maund while the rate of Phutti is in between Rs 6,500 to Rs 7,700 per 40 kg.
The rate of cotton in Punjab is in between Rs 16,000 to Rs 18,000 per maund. The rate of Phutti is in between Rs 6,700 to Rs 8,700 per 40 kg.
The rate of cotton in Balochistan is in between Rs 15,000 to Rs 16,000 per maund and the rate of Phutti is in between 7,000 to Rs 9,000 per 40 kg. The Spot Rate Committee of the Karachi Cotton Association increased the spot rate by Rs 1,000 per maund and closed it at Rs 17,000 per maund.
Chairman Karachi Cotton Brokers Forum Naseem Usman has said that a bullish trend prevails in international cotton markets. The rate of Future Trading of Cotton remained 84.38 American cents.
According to USDA’s weekly export and sales report, one Lakh and eighty six thousand and hundred bales were sold for the year 2023-24.
China was at the top by buying 98,500 bales. Bangladesh bought 44,900 bales and came second. Vietnam bought 22,900 bales and ranked third.
However, Pakistan Cotton Ginners Association has appealed to the Chief of Army Staff, Prime Minister, Chief Minister Punjab to give directions to the TCP to immediately purchase one million bales of cotton to save the farmers and ginners from financial losses. Army Chief’s effort to stabilise the economy is commendable. The price of cotton should be determined in consultation with PCGA based on the intervention price of cotton which is Rs 8500 per 40 kg.
The fruits of ‘Grow More Cotton campaign’ should be distributed among farmers. Cotton stock of worth Rs100 billion is available in the factories of the ginners.
Urgent measures should be taken to save the cotton crop’s biggest stakeholders, which are ginners, from disaster, said PCGA Chairman Waheed Arshad, Vice Chairman Rana Waseem Hanif, FPCCI Convener Malik Talat Sohail while addressing the press conference. They said Federal Minister for Commerce Gohar Ijaz and Provincial Minister of Punjab S M Tanveer are responsible for this situation.
Meanwhile, Senior Vice Chairman of Towel Manufacturers Association of Pakistan (TMA) Syed Usman Ali has expressed deep concern over the exorbitant increase in gas rates for export-oriented and general industries.
He strongly appealed to the Prime Minister and his cabinet to reject the ECC’s decision of huge hike in gas rates and urged them to fix gas rates at a level that is sustainable and manageable. He asserted that this would ensure the continuous functioning of the industry in Pakistan. “We are already paying higher gas rates in the region. Hence, the export-oriented sector is unable to bear the increase of gas prices,” he said. The biggest victim of the decision to increase the gas tariff will be the SMEs sector as they do not have the resources and they also operate on meagre profits. It will be very difficult for this sector to continue its manufacturing activities, he said.
However, the Karachi Chamber of Commerce & Industry (KCCI) and all seven industrial town associations of the megacity, while unanimously terming the extortionate hike in gas tariffs for export-oriented and general industries as ‘unviable, unacceptable & unfeasible’, vociferously appealed Prime Minister and his cabinet not to accept ECC’s decision of such a huge increase in gas tariffs and consider bringing gas tariffs to a level where these become viable and absorbable so that the wheels of industries in Karachi keep spinning.
The Karachi Chamber, Site Association of Industry, Korangi Association of Trade & Industry, North Karachi Association of Trade & Industry, Landhi Association of Trade & Industry, Federal B. Area Association of Trade & Industry, Bin Qasim Association of Trade & Industry and Site Superhighway Association of Trade & Industry also termed the unbearable hike in gas tariffs as “last nail in the coffin” because more than 90 percent of export-oriented industries and general industries in Karachi would not be able to bear this shock and close down, which would bring down the exports and local production to zero and prove devastating for the already ailing economy.
They pointed out that gas tariff for export-oriented industries has been raised by 86 percent to Rs2050 per MMBtu while for general industries, it has been enhanced by 117 percent to Rs2600 per MMBtu but this was not the end of the story, as 10 percent more will further be added in gas tariff as blended cost of RLNG, which would take gas tariff for export-oriented industries to around Rs2300 per MMBtu, leading to huge downward revision in Pakistan’s exports by rendering our goods uncompetitive in the world markets.
Copyright Business Recorder, 2023
Comments
Comments are closed.