The cotton market shows bearish trend as big groups of textile has completed the buying. The trading volume decreased. After advisor to PM on Commerce, Investment, Industries & Production and Textile Abdul Razaq Dawood showed his resolve of achieving the target of production of 15 million bales. The production of cotton can be increased gradually not at once.
During the last week in the local cotton market cautious buying was seen by textile and spinning mills especially the big textile groups has filled their demand of cotton due to which the prices of cotton decreased from Rs 100 to Rs 200 per maund but the trading volume also decreased. According to the sources of textile and spinning mills the demand of yarn has decreased as well as the financial crisis also increased. The rate of cotton in Sindh and Punjab remained between Rs 7500 to Rs 9000 per maund. The Spot Rate Committee of Karachi Cotton Association has decreased the rate by Rs 200 per maund and closed the rate at Rs 8800 per maund.
Chairman Karachi Cotton Brokers Forum told that sowing of cotton has started partially in Sindh and Punjab. According to the received information the sowing area of cotton will be more as compared to last year. Although until now the government fails to determine the support price of cotton.
Experts were of the view that support price of the cotton should be announced immediately as the sowing has started. The announcement of the support price by the government will encourage farmers and they will try hard to increase the production of cotton. The news regarding the announcement of government of fixing the support price of Phutti/cotton seed at Rs 3500 to 4000 per 40 kg is in the market. There is uncertainty in the market regarding announcement of the support price. Government should announce the support price as early as possible. The Federal Agriculture Committee has set the target of production of cotton before time.
Experts were of the view that without conducting the survey the target of production of 15 millions bales is set which is according to the resolve of Prime Minister Imran Khan. The fact is that the cotton production can be assessed in the mid of the month of June when sowing was completed in Sindh and Punjab. It is not appropriate to to assess the cotton production on the basis of hypothesis because the production of cotton was less then the assessment of FAC for the last four years.
It means that estimation was made without conducting proper survey. FAC should set its direction in the right way and assess area of the cultivation land rightly which should be beneficial both for the government as well as the industry associated with it.
More over Advisor to PM on Commerce, Investment, Industries & Production and Textile Razaq Dawood while addressing a seminar in Multan said that cotton has the share of 51 % in the country's economy which could not be ignored. He also said that target of production of 15 million bales can be achieved only by increased per acre yield and it should be increased in coming years.
He said that during the last week bearish trend was seen in the market. The New York Cotton Rate of Promise (Waday Ka Bhao) decreased by two cent due to the weather conditions in Texas which is the biggest cotton producing province of America. Moreover, the price of dollar increased and overall reduction was witnessed in export of cotton as compared to last week.
The bearish trend was seen in Chinese cotton market. China has announced to sell one million ton of cotton from its reserves while on the other hand announced to import 8 lac tons of cotton. The prices of cotton witnessed upward trend in India because the product of cotton is 35 lac bales less from the initial target of 1 crore 65 lac bales. But for the last two weeks the prices of cotton shows downward trend. We can say that mixed trend was seen in Indian Cotton Market.
According to the statistics of Pakistan Cotton Ginners Association till May 1, the production of cotton is 1 crore 15 lac 77 thousands bales as compared to last year's production of 1 crore 15 lac 82 thousand bales which is 8 lac 4 thousand bales (6.9%) less. The FAC has set the target of production of 15 million bales according to the resolve of Prime Minister Imran Khan for the year 2019-20.
Experts were of the view that this year FAC should set the target of production of 1 crore 8 lac bales and in the next season they set the target of 1 crore 25 lac to 30 lac bales, then set the target of 1 crore 35 lac to 40 lac bales and after that it would be better that they set the target of 15 million bales. The increase of 42 lac bales in the target looks inappropriate but it is hoped that target can be achieved by the grace of God.
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