KARACHI: The Spot Rate Committee of the Karachi Cotton Association on Tuesday increased the spot rate by Rs 100 per maund and closed it at Rs 9250 per maund.
Cotton Analyst told that local cotton market remained bullish on Tuesday. The rate of cotton reached at Rs 9500 per maund which is highest in the season.
Market sources that supply of Phutti is 19% less than previous year. The rate of cotton is increasing due to the non availability of quality Phutti in the market.
Earlier, Federal Minister for National Food Security and Research (NFSR),Syed Fakhar Imam while chairing meeting on Cotton Crop Assessment Committee said that Pakistan’s cotton sector would surely improve in coming years as effective measures are being taken. He was of the view that issues of domestic cotton production are seed quality, absence of new seed technology, heat waves and climate change, cotton leaf curl virus, pink bollworm and white fly.
He also said that there is 4% decline in cotton area. Resultantly pest complex has changed. In case of cotton, loss is observed in Multan division. Comparatively Bahawalpur and DG Khan is doing better. Punjab assessed production target between 5.30mn bales. Sindh also mentioned that due to heavy rains cotton crop is facing lots of issues. Mirpurkhas and Sanghar has faced crop damage. Sindh gave target of 3mn bales. KPK gave target of 0.065mn bales and Balochistan gave target of 0.291mn bales. The total estimated production of the country will be 8.597mn bales.
Moreover, the collection of sales tax from textile sector registered a six-fold increase in fiscal year 2019/2020 owing to elimination of zero-rated tax regime.
According to official statistics released by Federal Board of Revenue (FBR) the sales tax collection from textile sectors sharply increased to Rs 61.2 billion during fiscal year 2019/2020 as compared with Rs 8.7 billion in the preceding fiscal year, showing a growth of 602 percent.
The unprecedented growth in sales tax collection from this sector can be attributed to elimination of zero-rated scheme through Finance Act, 2019.
In the budget 2019/2020, the government decided to eliminate zero-rating scheme for textile sector and imposed normal 17 percent sales tax on all supply of textile products, except for those subject to exports.
The decision to eliminate the zero-rating was taken due to gross misuse of the scheme. The scheme also attracted issuance of bogus refunds on back of fake and flying invoices resulting huge monetary losses to the national exchequer.
However, in order to resolve the issue of exports in obtaining refunds under new schemes from July 01, 2019 the FBR introduced Fully Automated Sales Tax e-Refund (FASTER) system with a commitment that the refunds would be issued in 72 hours.
Sources in the FBR said that the collection of sales tax from textile sector would have been much higher but it was restricted due to economic slowdown after COVID-19.
ICE cotton futures climbed to over a seven-month high on Monday, on news that US President Donald Trump could be discharged from the hospital and concerns of crop damage from Storm Delta, which is soon expected to become a hurricane.
Cotton contracts for December rose 0.54 cent, or 0.8%, at 66.36 cents per lb by 1:02 p.m. EDT (1702 GMT), having earlier risen to their highest since Feb. 25 at 67.14 cents.
“There are forecasts for a potential hurricane to hit the southeast parts of the US, and this is coming at a time when we’re harvesting and the bolls are open, so we could suffer some losses,” said Jack Scoville, vice president at Chicago-based Price Futures Group.
Naseem told that 600 bales of Tando Adam were sold at Rs 8400 to 8600, 1400 bales of Saleh Pat were sold at Rs 9100, 2000 bales of Khairpur were sold at Rs 9100 to Rs 9200, 2600 bales of Haroonabad were sold at Rs 9300 to Rs 9550, 200 bales of Chisatin, 200 bales of Donga Bonga were sold at Rs 9500, 600 bales of Mianwali were sold in between Rs 9150 to Rs 9500, 2000 bales of Uch Sharif were sold at Rs 9500, 400 bales of Marrot were sold at Rs 9450, 2000 bales of Faqeerwali were sold at Rs 9350 to Rs 9500, 1000 bales of Fort Abbas were sold at Rs 9350 to Rs 9500, 400 bales of Bahawalpur were sold at Rs 9450, 2000 bales of Yazman Mandi were sold at Rs 9350 to Rs 9400, 200 bales of Hasilpur were sold at Rs 9300, 200 bales of Chichawatni were sold at Rs 9200, 400 bales of Tounsa Shreef were sold at Rs 9200, 400 bales of Layyah were sold at Rs 9200, 200 bales of Mongi Bangla were sold at Rs 8850.
He told that rate of cotton in Sindh was in between Rs8300 to Rs 9200. The rate of cotton in Punjab is in between Rs 8400 to Rs 9550. He also told that Phutti of Sindh was sold in between Rs 3800 to Rs 4400 per 40 kg. The rate of Phutti in Punjab is in between Rs 3800 to Rs 4700 per 40 kg.
The rate of Banola in Sindh was in between Rs 1600 to Rs 1900 while the price of Banola in Punjab was in between Rs 1900 to Rs 2100. The rate of cotton in Balochistan is in between Rs 8800 to Rs 9000 while the rate of Phutti is in between Rs 4400 to Rs 5500.
The Spot Rate Committee of the Karachi Cotton Association increased the spot rate by Rs 100 per maund and closed it at Rs 9250 per maund. The polyester fiber was available at Rs 153 per kg.
Copyright Business Recorder, 2020
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