KARACHI: Decline in cotton prices was witnessed due to lack of interest from textile mills. The Spot Rate was reduced by Rs 500 per maund. Business volume also remained limited.
The ongoing crisis in the textile sector has further increased. Textile chain and other allied industries are badly affected due to sharp increase in gas price.
However, the government has disappointed the cotton farmers by not buying cotton through Trading Corporation of Pakistan (TCP) despite its promise, and the production of cotton is expected to be affected next year.
The delegation of Mali has appealed to the government and the concerned institutions and Plant Protection Organisation regarding lifting the ban on cotton import in Pakistan.
In the domestic cotton market, cautious buying of cotton by textile mills during the past week led to a very subdued business volume, despite efforts by ginners to sell more cotton. Due to the low business volume, the price of cotton in the market also decreased. The price of cotton decreased by from Rs. 500 to Rs1000 per maund, and the spot rate committee of Karachi Cotton Association also reduced the spot rate by Rs 500 per maund.
In fact, all industries including the entire textile sector have been badly affected due to the drastic increase in the price of energy, especially gas. As a result, about 50 percent of the textile mills, rather the entire textile sector, have been completely affected. Some mills are forced to run partially.
All Pakistan Textile Mills Association and textile-related sectors have been continuously appealing to the government to bring out the entire textile chain from crisis. Textile industry is the highest foreign exchange earner and the largest employment provider in the country, but their appeals have been continuously ignored.
The industrialists of Karachi, Sindh and Balochistan have announced a one-day strike on Monday (today) due to the gas crisis.
Obviously, due to the textile chain being affected, the cotton business is also being badly affected, and every sector related to the cotton business is in a deep trouble.
The government had announced that it will buy one million bales from the cotton farmers through Trading Corporation of Pakistan (TCP) to keep the price stable if the price of Phutti per 40 kg becomes less than Rs 8,500, but the government has failed to fulfil its promise. As such, it is feared that farmers will grow less cotton next year.
Though, the meetings of the Cotton Crop Assessment Committee are held every year to give correct estimates of the cotton crop in the country, but the month of December has started but not a single meeting of the CCAC has been called so far. Because of this, it is difficult to estimate the production of cotton, especially in the province of Punjab, where it is much lower than previous estimates, and the reasons for this are not known.
Although the Department of Agriculture of the Punjab government had made promises to increase the production of cotton in Punjab, there is an urgent need to know the reasons behind less crop yield so that these issues can be resolved before the next season.
The rate of cotton in Sindh as per quality is in between Rs 15,000 to Rs 17,000 per maund and the rate of Phutti is in between Rs 5,000 to Rs 7,200 per 40 kg.
The rate of cotton in Punjab is in between Rs 15,800 to Rs 17,500 per maund while the rate of Phutti is in between Rs 6,000 to Rs 7,800 per maund.
The rate of cotton in Balochistan is in between Rs 17,000 to Rs 17,500 per maund. The rate of Phutti is in between Rs 6,800 to Rs 8,200 per 40 kg. The rates of Khal, Banola and oil are, relatively, low.
The Spot Rate Committee of the Karachi Cotton Association decreased the spot rate by Rs 5,00 per maund and closed it at Rs 17,000 per maund.
Naseem Usman, chairman of Karachi Cotton Brokers Forum, said that the international cotton market remained stable after some ups and downs.
According to USDA’s weekly export and sales report, two lac and seventeen thousand and seven hundred bales were sold for the year 2023-24.
Vietnam topped the list by buying one lac bales. China bought 64,600 bales and came second. Guatemala bought 36 thousand 900 bales and was in third place.
As many as 15,400 bales were sold for the year 2024-25 which was bought only by Turkey.
Pakistan has exported at least 125,000 bales of cotton this season and the quantity will improve further during the current crop season.
Cotton shipments are being earmarked for China, Vietnam and Indonesia and importantly, all these export deals were made by only one cotton ginner from Sindh, Dr Jasu Mall.
It is expected that the same quantity of cotton bales will be exported during the rest of the season. Cotton exports have not entered six figures since 2017-18, when the exports stood at 207,424 bales. The country exported only 4,900 bales in 2022-23, 16,000 bales in 2021-22 and 70,200 bales in 2020-21.
Ginners are saying that better lint quality and booming international markets are attracting foreign buyers towards Pakistani cotton.
Ihsanul Haq, chairman of the Cotton Ginners Forum, has said that the lack of rains in most cotton growing areas helped to improve the quality of the crop, and that the record depreciation of the rupee local cotton becomes cheap which lead to the local cotton being sold in the global markets.
He says that if the production of lint had not decreased due to the heavy attack of whitefly in Punjab, the cotton exports would have set a record. He said negative effects of environmental pollution are also being felt.
He urged the government to refrain from imposing heavy taxes on the textile sector under pressure from the International Monetary Fund (IMF) as the sector has already been suffering from exorbitant gas and electricity rates, as well as, mark-up rates.
It is said that nearly 60 percent of the country’s textile mills have become inactive due to ongoing financial and energy problems and it is feared that the local industry will fail to consume even 9 million bales of cotton.
Sajid Mehmood, Head of Transfer of Technology Department, CCRI Multan, has said in a statement that despite the government’s announcement, the TCP failed to purchase cotton, and the resultant loss of cotton farmers is a big tragedy.
In is a big question that who benefited from this ‘game’.
It is important to get answers to such questions. It seems that cotton cultivation will be very less in the coming year. Even in Sindh, rice cultivation will increase up to Sukkur. Cotton will be planted only in Punjab and Sindh in areas where water is available. Cotton area will only increase in Balochistan.
The existence of the state is based on the trust of the people and when the work is done by mere words rather than deeds, the credibility of the state is badly damaged. Due to the ongoing situation of the cotton sector there will be a significant reduction in cotton cultivation next year.
Meanwhile, a six-member delegation from the Republic of Mali visited the Karachi Cotton Association on Wednesday. Chairman Atif Dada met the directors and members. The delegation represented Mali’s Ministry of Industry and Trade, Ministry of Agriculture and relevant institutions for plant protection and phytosanitary controls.
The delegation discussed the ongoing ban on the import of Mali’s cotton in Pakistan and the mechanism to meet the requirements for lifting the ban. The delegates informed about the meetings held with various organisations in Pakistan related to this issue.
They discussed the possibilities of increasing mutual trade and investment between the two countries. It was suggested to the delegation that after the lifting of the embargo, the Republic of Mali could import value-added textile products from Pakistan using cotton imported from Mali to Pakistan.
Copyright Business Recorder, 2023
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