KARACHI: Trading activity remained stable on the local cotton market on Tuesday. Market sources told that mills were involved in cautious buying due to which the trading volume remained low.
Meanwhile, textile value-added sector has urged the government to allow duty-free cotton yarn to reduce cost of production and increase the country's exports.
Muhammad Jawed Bilwani, Chairman, Pakistan Apparel Forum, said that the government's lack of priority and attention to increase cotton yield to support the entire value-added textile chain was highly shocking and deplorable.
He further said that Pakistan was an agriculture country but no concrete steps and measures along with productive policy had been witnessed from successive governments during the last several decades to uplift per hectare yield of the agriculture produce particularly of cotton.
Cotton Analyst Naseem Usman told that it is expected that this year cotton production will be 35% less as compared to last year. He said that after the decrease in cotton production we have to import cotton of worth millions of dollar like we are importing edible oil of worth millions of dollars.
The government has almost finalised the Textile Policy 2020-25 with textile products' export target of $20.8 billion and eight objectives starting from encouraging value addition, ensuring profitability of cotton growers to strengthen Pakistan's expertise in manmade fiber, putting small medium enterprises (SMEs) on priority for infrastructure, compliance, energy efficiency, quality assurance and productivity projects.
Naseem also told that The Brand Development Fund (BDF) will be launched to help boost export of textile products. Textiles and apparel machinery will be zero rated.
Under the proposed textile policy, electricity tariff will be at 7.5 cent per unit and RLNG tariff at 6.5 cent per MMBTU, while the system gas will be provided to textile sector at Rs786 per MMBTU. However, the current electricity tariff for export industry stands at 9 cent per unit that will be decreased to 7.5 cent per unit for three years (till 2025), once the policy is approved and gets enforced.
Electricity tariff of 7.5 cent per unit and gas price of $6.5 per MMBTU till 2025 will help attract investment in textiles and apparel value-chain and textile.
The Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) regional chairman Adeeb Iqbal has appealed the State Bank of Pakistan to stop sending show cause notices to the exporters for not realizing their exports' proceeds due to global outbreak of Covid-19.
In a statement issued here on Monday, he said that the show cause notices by the SBP have created a lot of resentment and unrest among the value-added textile exporters, who are already facing severe liquidity crunch owing to non-payment by the international buyers for indefinite period amidst post-corona worldwide economic slowdown.
The central bank has to make amendments in Foreign Exchange Regulations in the wake of the emerging circumstances due to global outbreak of COVID-19, allowing extension in the realization period beyond six months from the date of exports shipment, he demanded. "We request the SBP governor to formalize new policies in consultations with the exporters, including PRGMEA, making new policies in this regard in view of the post-corona economic crunch when the foreign buyers have either held their payments or making partial payments," he added.
Moreover, ICE cotton futures climbed to their highest in nearly 18 months on Monday, driven by freezing weather conditions in major growing regions in the United States and concerns over further crop damage from Tropical Storm Zeta.
The cotton contract for December rose 0.98 cent, or 1.4%, at 72.27 cents per lb by 1:27 p.m. EDT (1727 GMT). The front-month contract hit its highest since May 7, 2019 at 72.35 cents.
"There is a front with snow, ice and sleet over the south-western cotton and there's this really weak hurricane that may come up into the Louisiana area," said Rogers Varner, president of Varner Brokerage in Cleveland.
Chairman Pakistan Cotton Ginners Association Dr Jassumal said that during the meeting of the Federal Committee on Agriculture the support price of Kharif crops were determined but the support price of cotton was not discussed.
Naseem told that 200 bales of Moro were sold at Rs 9500 per maund, 1600 bales of Khairpur were sold at Rs 9475 to Rs 9500 per maund, 2000 bales of Exporters to Mill were sold at Rs 10250 per maund, 400 bales of Layyah were sold at Rs 9650 to Rs 9700 per maund, 200 bales of Shadan Lund were sold at Rs 9800 per maund, 400 bales of Sadiqabad, 400 bales of Mianwali were sold at Rs 10,000, 200 bales of Lodhran, 400 bales of Multan, 200 bales of Head Rajkan, 400 bales of Bagho Bahar, 400 bales of Shujabad, 400 bales of Rahim Yar Khan, 400 bales of Khanpur were sold at Rs 10,300 per maund, 600 bales of Bagh-o-Bahar were sold at Rs 10,300 to Rs 10,350 per maund, 400 bales of Faqeerwali were sold at Rs 10,250 to Rs 10,350 per per maund, 1600 bales of Bahawalpur were sold at Rs 10,200 to Rs 10,300 per maund, 400 bales of Yazman Mandi were sold at Rs 10,250 to Rs 10,300 per maund and 800 bales of Haroonabad were sold at Rs 10,300 to Rs 10,350 per maund.
He told that rate of cotton in Sindh was in between Rs 8600 to Rs 10,000. The rate of cotton in Punjab is in between Rs 9800 to Rs 10,400. He also told that Phutti of Sindh was sold in between Rs 4000 to Rs 5100 per 40 kg. The rate of Phutti in Punjab is in between Rs 4400 to Rs 5300 per 40 kg.
The rate of Banola in Sindh was in between Rs 1650 to Rs 2100 while the price of Banola in Punjab was in between Rs 1850 to Rs 2150. The rate of cotton in Balochistan is in between Rs 9600 to Rs 9700 while the rate of Phutti is in between Rs 5000 to Rs 5500.
The Spot Rate Committee of the Karachi Cotton Association stabled the spot rate at Rs 10,100 per maund. The Polyster Fiber was increased by Rs 2 per kg and was available at Rs 158 per Kg.
Copyright Business Recorder, 2020
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