KARACHI: Stability was witnessed in the rate of cotton; however, business volumes were relatively low. Industries badly affected due to sharp rise in gas prices. Increase in crisis in the textile sector.
PHMA and KPK Textile Mills Association have protested against gas price hike. There was a significant increase in cotton production in Sindh province. Committee for International Co-operation between Cotton Associations (CICCA) has elected KCA Chairman Atif Dada as CICCA Chairman for two years which is a great honour for Karachi Cotton Association.
In the domestic cotton market, cotton prices remained stable during the past week because the textile mills are taking interest in quality cotton while buying of light quality cotton remained low.
Overall trading volume is low. However, international cotton volume is down significantly. The rate of Future Trading of New York cotton after reaching a low level of 74.50 US cents per pound closed at 77.32 US cents.
The reason behind is recession as well as continuous fall in the price of cotton in China’s future cotton market, which is also having a negative impact on the price of the New York future cotton market.
On the other hand, the textile sector in the country has already been suffering from a crisis. From above, the government has increased the price of gas and put textile industry on the verge of collapse along with all other industries.
According to sources in the textile sector, more textile mills will start shutting down after the new gas bills.
Karachi Chamber of Commerce and more than twenty industries of Karachi have given several advertisements but it is continuously ignored by the government.
In the advertisement it was demanded from the government that thousands of people get employment through the industries of Karachi and more than 60% of the revenue is earned from Karachi and Industry of Karachi is on the verge of closure.
A sharp increase in gas price will lead to closure of more industries. These industry bodies say that the government is looking to close down industries that lay golden eggs.
The already existing crisis in the cotton market will intensify and industries will either partially operate or begin to close down. This will increase unemployment. Production cost will also increase.
The rate of cotton in Sindh is in between Rs 15,500 to Rs 18,500 per maund. The rate of Phutti is in between Rs 5,500 to Rs 7,200 per 40 kg.
The rate of cotton in Punjab is in between Rs 16,800 to Rs 18,000 per maund. The rate of Phutti is in between Rs 6,500 to Rs 8,200 per 40 kg. The rate of cotton in Balochistan is in between Rs 16,000 to Rs 17,200 per maund. The rate of Phutti is in between Rs 7,000 to Rs 8,500 per 40 kg. The rate of Khal, Banola and oil remained stable.
The Spot Rate Committee of the Karachi Cotton Association increased the spot rate by Rs 2,00 per maund and closed it at Rs 17,700 per maund.
Chairman Karachi Cotton Brokers Forum Naseem Usman told that bearish trend prevails in the international cotton markets. The rate of Future Trading of New York reached at 77.32 American cent per pound which is lowest in the last one year. According to the report, three lac ninety five thousand and two hundred bales were sold for the year 2023-24. China was at the top by buying two lac and sixty thousand bales. Vietnam was second with 54,500 bales.
Pakistan bought 27,200 bales and stood at the third position. 44,500 bales were sold for the year 2024-25. Pakistan was at the top by buying 44,000 bales. Japan was second with 500 bales.
Cotton production in Sindh province is expected to be significant this year. To put this difference in context, consider that if the province were different countries, Sindh would rank seventh in the world in terms of production, even higher than the United States! while Punjab will be ranked 40th, which is much lower than the global average.
During the season 2023-24, cotton production in Punjab will remain at 6.9 million bales as against the target of 8.2 million bales set at the beginning of the season.
The fall in production has been attributed to a shortfall in achieving the sowing target, which was set at 5 million acres. Official sources said in an interview that only 4.12 million acres of this important crop were under cultivation. He said that the production target of 8.2 million acres was expected with a yield of 19.67 maunds per acre. However, he said the yield achieved was 20 maunds per acre thus yielding 6.9 million bales.
He attributed the healthy yield per acre to the initiatives taken by the provincial government and the agriculture department, including ensuring proper technical guidance and quality information.
Sources added that last year the production in the province was only 3.2 million bales and the area under cotton cultivation was 3.6 million acres.
The Khyber Pakhtunkhwa Textile Mills Association (KPTMA) has issued a strong statement against the hike in gas prices and the policy of supplying blended gas to KP industries.
In an emergency meeting convened at the PTMA House here on Tuesday, the representatives of all the members unanimously rejected the proposed increase in gas rates and introduction of blended gas for industries in KP.
KPTMA Chairman Muhammad Kamran Shah expressed concern over the significant increase in gas prices and recommended that the government should consult all stakeholders fully before finalizing any decision. He stressed on the importance of getting insights from gas producing provinces.
He drew attention to the glaring discrepancy, which shows that the Oil and Gas Regulatory Authority (Ogra) has determined the estimated revenue requirement for Sui Northern Gas Pipelines Limited (SNGPL).
1,238.49 per MMBTU. In contrast, the government had announced an effective rate of Rs 1.2,400 per mmbtu for the KP industry, incorporating cross-subsidies to benefit the feedstock/fertilizer sector and the domestic sector.
Javed Balwani pointed out that Karachi’s industries have appealed to the government to intervene and re-evaluate.
A decision should be taken in the national interest to protect and maintain the industry from complete destruction and sabotage of exports. Export markets once lost, it cannot be easily regained. The government will be responsible for all adverse and fatal effects.
After that, the members of the general body of PHMA endorsed the submissions of Patron General Muhammad Javed Balwani.
It was unanimously decided that PHMA as well as all stakeholders associations and Karachi Chamber of Commerce and Industry (KCCI) should strongly take up this issue with all concerned in the government.
Export industries and indirect exporters are not in a position to bear and absorb this huge increase in industrial gas prices. The general body members urged the association to protest, put up protest banners across the city.
Export orders placed by foreign buyers, opt for continuous agitation and also observe “No Export Days”.
Taking a serious note, the government has called the industries of Karachi to reconsider the issue of excess. Extraordinary increase in industrial gas tariff for industries affiliated to SSGCL. It was unanimously decided by the General Body that Karachi Industries will be affiliated to SSGCL.
The protest continued against this unwise decision of the government to increase the industrial gas tariff which the industries cannot bear and absorb.
Already burdened with high manufacturing costs that made them impractical and uncompetitive to operate, industries will continue to protest against this on every place. The government pays serious attention to Karachi’s industries and their representatives on board to revise the decision and introduce and implement fair.
The Secretariat of Committee for International Co-operation between Cotton Associations (CICCA), Liverpool, UK has been pleased to share the results of Election of Chairman & Vice Chairman, CICCA for the year 2023-2025.
The CICCA is delighted to announce that Mr. Muhammad Atif Dada, Chairman, the Karachi Cotton Association has been elected as Chairman of Committee for International Co-operation between Cotton Associations (CICCA) w.e.f. 16.10.2023 for two years. He has also served as Vice Chairman CICCA from 2021-23.
This is an honour and great achievement for the Karachi Cotton Association that for the first time not only in the history of Pakistan or Indian Sub-continent but in the history of Asia that a Chairman has been elected from Asian region.
Muhammad Atif Dada of M/s Dada Sons (Pvt.) Limited, after acquiring higher education from Cambridge system has been engaged in the Family Business. His family has been a prominent and well renowned entrepreneur and trader of raw cotton & allied items, real estate, ship breaking, steel, pulses etc and also engaged in philanthropic activities since more than four decades.
Atif Dada has been elected as Chairman and Vice-Chairman of the Karachi Cotton Association multiple times over the years.
He has served as Member, Executive Committee and General Body of the Federation of Pakistan Chamber of Commerce and Industry (FPCCI) for numerous years and currently serving as Director of Better Cotton Initiative (BCI) Pakistan since its inception, the apex bodies of the Business Community and Cotton Development respectively.
Muhammad Atif Dada has also served as Member of the Private Sector Advisory Panel of ICAC for a number of years and has represented the KCA on the Committee for International Co-operation between Cotton Associations (CICCA) for many years. He has also represented as Director on International Cotton Association (ICA) in the year 2008-09 to 2015-16 and also Member in several Sub-committees of the ICA.
He has also been engaged in philanthropic activities and currently serves a Member Executive Committee of the Kiran Hospital Patients Welfare Trust.
CICCA is assured of his full support to achieve future endeavours and for betterment of global cotton economy.
Copyright Business Recorder, 2023
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