COTTON WEEKLY REVIEW: Prices remain stable

The prices of cotton remained stable over all. There is uncertainty in the international market due to the contradictory statements of American President Donald Trump on "trade war". It looks that hard times of local textile industry is going to be over which will have a positive impact on local cotton market.

In the local cotton market during the last week local textile industry was involved in cautious buying while ginners' interest was increased in the buying of cotton due to which the rate of cotton remained stable. Due to the less availability of good quality cotton in the market few mills are trying to sale good quality cotton. The trading volume is medium. Due to the ending of the season ginners were showing interest in buying because stocking of cotton is very expensive this year. The big stockiest of cotton were interested in selling of cotton like previous year. The low quality of cotton is abundant in quantity and its buyers were also in small numbers due to which ginners involved in making of low quality cotton were in panic. In the grain markets of Punjab low quality of cotton was available in large quantity.

In Sindh the price of cotton is in between Rs 7400 to Rs 9100 per maund while the rate of Phutti is in between Rs 2800 to Rs 4050 per 40 Kg. In Punjab the rate of cotton is in between Rs 8000 to Rs 9100 per maund while the rate of Phutti is in between Rs 2800 to Rs 4100 per 40 Kg. In Balochistan the rate of cotton is in between Rs 7600 to Rs 8700 per maund while Phutti was not available. Due to the low production of cotton the increasing trend in the prices of Banola, Banola Khal and Banola Oil remained continued.

The Spot Rate Committee of Karachi Cotton Association has decreased the rate by Rs 50 per maund and closed it at Rs 8750.

Chairman Karachi Cotton Brokers Forum Naseem Usman told that mixed trend was seen in the prices of cotton in the international market. Fluctuation was seen in the rate of New York Cotton Market due to the trade conflict between America and China. Mixed trend was seen in the prices of cotton in Chinese market while due to the crisis like situation in the Indian cotton market bearish trend continues. On Thursday American President Donald Trump's satisfactory statement regarding long standing America and China trade war that the issue has been solved partially. After this statement the world economic markets and stock exchanges witnessed bullish trend. This statement has also an impact on cotton market. The rate of Promise (Waday Ka Bhao) of New York Cotton has increased by 2 American cents this has impacted local cotton market and as a result of which buying was increased in local cotton market.

Like always once again American President has taken a "U turn" on its statement on America and China trade conflict and created confusion and contradicted its statement. After the positive statement trade activities in the world increased after the negative statement uncertainty prevails in the market, although China has taken the statement positively.

Moreover, on last Wednesday a delegation of All Pakistan Textile Mills Association called on Advisor of Prime Minister on trade Abdul Razzaq Dawood and chairman Federal Board of Revenue Shabbar Zaidi and requested them to release the tax refund of textile sector and also requested them to give concessions regarding the rate of energy. Advisor on trade assured them that he will try its best that industry will get energy on concessional rate.

Trade ministry has announced that very soon memorandum will be issued to give especial status to export sector which include textile, leather, carpet, sports and surgical goods. According to memorandum the issues of rate of power tariff and the issue of decreasing the rate of RLNG for export sector will be solved.

On Wednesday APTMA delegation under the leadership of chairman APTMA met Advisor of Prime Minister on trade Abdul Razzaq Dawood and discussed with him with the matters relating to power tariff. Trade Advisor said that meeting of APTMA delegation with Prime Minster Imran Khan will be arranged next week for the solution of the issue of three months power charges. APTMA lauded the implementation of Free Trade Agreement with China from January 1st 2020. Chairman APTMA thanked for releasing duty draw back amount of textile sector of worth Rs 17 billion 60 crores.

Trade Advisor said government is aware of the issues of textile sector and FBR is cooperating with the government regarding simplification of form H. He said textile value chain should cooperate with the government regarding making of third textile policy so that the issues of textile value chain will be solved. Small and Medium Sector enterprise should be given priority. He said that matters regarding imposition of taxes by federal and provincial governments should be taken under consideration as well as credit and technological up gradation will be given attention in the policy.

Secretary commerce and trade said very soon a memorandum will be issued to give especial status to export sector including textile, leather, carpets, sports goods and surgical goods. This memorandum will solve the issues of power tariff and decreasing the rate of RLNG rate of export sector. Moreover, China will import 313 items from Pakistan from January 2020 which includes textile products. If the textile sector of the country will be strong then it has a positive impact on the cotton trade.