KARACHI: The production of cotton till now is said to be seventy three lac and seventy thousand bales; however, the total production is expected to be around 90 lac bales. The price of quality cotton remained stable previous week; however, business volume was very low. The financial crisis of the textile sector is getting further intensified.
There is a recession in local and international market of cotton yarn and textile products. A 6.38percent decline in textile sector exports has already been recorded. Pakistan Hosiery Manufacturers Association (PHMA) and Towel Manufacturers Association (TMA) has requested the government to announce a bail package to take textile industry out from the escalating crisis, and export policy should be made more useful.
Gas and electricity tariffs are likely to increase further and production cost will also increase correspondingly.
In the domestic cotton market, prices remained stable during the past week. Textile spinners are continuously interested in buying quality cotton due to which prices are stable. As the quantity of quality cotton is limited, the ginners are also cautiously selling. Business volume is relatively low.
Meanwhile, the largest textile sector of the country is continuously nose-diving. On the other hand, PHMA and TMA are presenting their problems before the government.
The biggest issuer they are facing is continuous increase in gas tariffs which is badly affected their business, as their production costs are increasing and many mills have already shut down fully or partially their operations.
On the other hand, different opinions are being given regarding the production of cotton. Some circles are estimating that the total production of cotton will be 80 to 85 lakh bales, while other circles are estimating that production of cotton will be 90 to 95 lac bales.
Pakistan Cotton Ginners Association has released the data of cotton production in the country till November 15, according to which cotton production was seventy lac and seventy three thousand bales during this period.
The price of cotton in Sindh province is in between Rs 16,000 to Rs 18,000 per maund while the rate of Phutti is in between Rs 5,200 to Rs 7,200 per 40 kg according to the quality.
The price of cotton in Punjab province is in between Rs 16,500 to Rs 18,000 and the rate of Phutti is in between Rs 6,500 to Rs 7,800 per 40 kg.
The rate of cotton in Balochistan province is in between Rs 17,000 to Rs 17,500 per maund. The rate of Phutti is in between Rs 7,000 to Rs 8,200 per 40 kg. The rate of Banola, Khal and oil has remained stable.
The Spot Rate Committee of the Karachi Cotton Association decreased the spot rate by Rs 2,00 per maund and closed it at Rs 17,500 per maund.
Naseem Usman, chairman of Karachi Cotton Brokers Forum, said that the price of cotton in the international cotton market is stable. The rate of Future Trading of New York cotton is 78.92 US cents per pound.
According to USDA’s weekly export and sales report for the year 2023-24, three lac and twenty eight thousand bales were sold. China was at the top by buying one lac and seventy six thousand and two hundred bales. Mexico was second by buying 35,000 bales.
Vietnam bought 32, 200 bales and ranked third. As much as 30, 400 bales were sold for the year 2024-25. Mexico was at the top by buying 11,200 bales. Guatemala was second with 7,100 bales and Honduras was third with 5,500 bales.
However, Pakistan Bureau of Statistics (PBS) has said that exports of the country’s textile group during the first four months of the current fiscal year (July-October) fell by about 6.33 percent to Rs5.94 billion against 5.565 billion dollars during the same period previous year.
The country’s total exports during the July-October fiscal year 2023-24 stood at $9.6 billion (provisional), showing a decline of 0.48 percent as against $9.554 billion during the same period last year.
Senior Vice Chairman Syed Usman Ali along with prominent exporters of the Towel Manufacturers Association expressed their concern over ‘anti-export’ policies of the government, adversely affecting the country’s exports. He said that our economy is going through a very critical period and we should work together for salvage of our economy, especially the export sectors of Pakistan.
The TMA Senior Vice Chairman said that the business community especially the exporters are standing with the government to surpass their revenue generation target despite all odds but the government should come forward with a comprehensive plan and facilitate the business community/ exporters so that they can play their vital role for the economic up lift, as well as, for collecting valuable foreign exchange for the country.
However, over 7.3 million bales of seed cotton have reached ginning the factories across Pakistan as of November 15, 2023, according to a fortnightly report from the Pakistan Cotton Ginners Association (PCGA) released on Saturday.
Of the total cotton arrivals, over 7.0 million bales have undergone the ginning process, converting them into marketable cotton bales. Cotton arrivals in Punjab were recorded at over 3.4 million bales, or 34,28,915 bales, while Sindh generated over 3.9 million bales, or 39,41,709 bales.
The textile sector purchased 63,22,047 bales, exporters acquired 2,79,826 bales, and the Trading Corporation of Pakistan (TCP) did not make any purchases during the cotton season 2023-24.
Sanghar district of Sindh topped the cotton arrival figures with 16,53,830 bales, followed by Bahawalnagar district of Punjab with 8,18,032 bales. A total of 455 ginning factories were operational in the country, and there was an unsold stock of exactly 7,68,751 cotton bales.
Naseem Usman, chairman of Karachi Cotton Brokers Forum, while commenting on the report, said that because last year PCGA had not released the cotton production statistics till November 15, due to which no comparison could be made; however, looking at the report, total production of cotton is expected to be between 85 to 90 lac bales.
The government’s initial estimate of cotton production was one Crore twenty seven lac and seventy thousand bales, while as per FCA revised estimate production target will be one Crore and eleven lac bales. According to the estimates production of cotton will be 85 to 90 lac bales.
In fact, the production of cotton per acre in Punjab province was about 15 to 20 maund, while in Sindh province the production of cotton is 35-40 maund per acre.
As in previous years, this year also, Sindh’s Sanghar district was on the top in the production of cotton.
Looking at the fortnightly figures of PCGA, it is estimated that now the cotton season in Pakistan has reached its final stages. But one thing that is very important is that there is absolutely no proper business in the market at this time. Textile mills have severely restricted their purchases. Their expenses have increased tremendously due to which the cotton market has also been affected.
He said according to our assessment at the end of the season, the ginners would be out of the financial crisis they were in last month, but the textile mills have a long way to go. They need immediate respite from the government in interest and energy rates; otherwise, the situation will deteriorate further and selling of the last 15 lac bales will become a problem.
The slogan of buying cotton through TCP was nothing but a hoax as the government did not have the money, as well as, institutional strength to undertake this task and that is why the cotton farmers are bearing a loss.
Looking at the fortnightly figures of PCGA, as per estimates there is no bullish trend in the market and the market will remain steady.
Separately, six licensed cotton brokers from Naseem Usman Panel have been duly elected unopposed as members of the Broker Advisory Committee of Karachi Cotton Association for the years 2019-20.
Muhammad Naseem Usman, Chairman; Abdul Jalil Khan Vice Chairman; Taqi Abbas, Secretary; Chander Lal, Joint Secretary; Ali Muhammad Taufique Haroon, Treasurer and Girdhari Lal Assudomal Public Relations secretary were elected unopposed.
The Chairman of the Broker Advisory Committee has stated on behalf of the panel that they would like to thank all 320 KCA brokers for their trust on them. They would continue with their effort for resumption of hedge trading under the KCA platform, which would be beneficial for all stakeholders of the cotton & textile industry. They would also continue to look after the interests of the Broker Committee.
Chairman Karachi Cotton Brokers Forum said that this year due to untimely rains and extreme hot weather in the areas of cotton production, the crop was attacked by different kinds of germs and viruses.
He said the attack of White Fly and Pink Ball Worm had destroyed the standing crops due to which crop suffered irreparable loss. After suffering huge loss, the farmers were disappointed and they cut their crops before time. On the other hand cotton crop was affected due to the use of substandard seeds and pesticides.
Ginners, as well as, farmers were affected due to the reduction in per acre yield. This year many ginners did not start their factories and a few ginners after starting operations for some time close their factories. Farmers were of the view that they had suffered a huge loss and they will be not sow cotton next year.
Copyright Business Recorder, 2023
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