KARACHI: The Spot Rate Committee of the Karachi Cotton Association on Tuesday has decreased the spot rate by Rs 200 per maund and closed it at at Rs 9700 per maund.
The local market remained bearish on Tuesday. Market sources told that mills were involved in cautious buying due to which the trading volume remained low.
Cotton Analyst Naseem Usman told that according to the statistics released by Pakistan Cotton Ginners Association till October 31 there is an alarming drop of 26 lac bales in the cotton production. The production of cotton will be 55 lac bales. Around 70 lac bales will be imported from abroad.
According to the PCGA report 34 lac 52 thousand three hundred and eighty two bales were produced till October 31 which is 26 lac fourty five thousand and eighty three bales less than the last year's cotton production of 60 lac 97 thousand and 465 bales. The cotton production was declined by 43.38%.
During this period local textile mills had bought 25 lac 70 thousand and 537 bales while last year during this period 44 lac 25 thousand and 847 bales bought by the mills which is 18 lac 55 thousand and 47 bales less then the last year's buying by the local mills. The buying by the mills was decreased by around 41.90%.
The ginners had the stock of 8 lac 64 thousand and 245 bales which is 7 lac 65 thousand and 413 bales less as compared to the last year stock of 16 lac 29 thousand and 658 bales. The stock was 46.97% less as compared to last year.
According to the report this year 528 ginning factories are functional which is 31.34% less as compared to the 769 factories which were functional last year.
Naseem Usman while commenting on the report said that cotton production is continuously declining in the country. This year it is expected that around 55 lac bales will be produced in the country. The local demand of textile mills will be around one crore 40 lac bales adding that 70 lac bales of around three billion dollars will have to be imported from abroad in order to fulfil the demands of the local textile mills.
Meanwhile, Pakistan Hosiery Manufacturers & Exporters Association said that huge export orders are coming to Pakistan despite COVID 19. This is a golden opportunity to achieve milestone in exports. However, cotton yarn- basic raw material is unavailable for apparel and home textile sector in local markets which may lead to decline in textile exports.
Spinning sector is allowed duty free import of cotton while apparel and home textile sector are not allowed duty free import of cotton yarn which is discrimination. PHMA demands that customs and regulatory duty on import of cotton yarn should be abolished.
On the other hand All Pakistan Textile Mills Association (APTMA) in a press release reiterates that there is no shortage of yarn in the country. In fact, the import of cotton yarn in the first quarter of FY 2020 last year was 11,047 tons, while it rose to 13,976 tons in the first quarter of FY 2021, showing an increase of 27%.
Similarly Yarn Exports have also reduced significantly while production of Yarn in the country has increased signifying enhanced supply of yarn to further processing and value addition in-country. The import and export data of yarn is attached herewith.
The export-oriented sectors of Pakistan have shown extraordinary growth and exceeded targets, outperforming regional players. In September 2020, there was 11.3% surge in textile exports, leading to the impressive export volume of $3,469.5 million in July-September (FY2020-21). Prime Minister Imran Khan's efforts to promote export-led economic growth have proved instrumental in this regard.
Naseem told that experts have raised the question Is Pakistan travelling towards the end of its cotton production? It seems so if the last few years of dropping acreage, dipping per-acre yield, sinking national production and climatic impact are any indication. The quality of the yield is an entirely different topic.
The current year's statistics further bear testament to this theory. According to the Pakistan Cotton Ginning Association (PCGA), the arrival of cotton by October 18 has fallen by a whopping 39.24 per cent (2.6 million bales against 4.4m last year). The official expectation for this year is 8.5m billion bales against a target of 10.89m. On its part, the PCGA believes that last year's production was 8.5m bales and not 9.1m bales as claimed by the Pakistan Economic Survey.
The ginners think that the country may end up only producing 6.5m to 7m bales this year - far less than half of the requirement of the industry
In its tweet Advisor to Prime Minister on Commerce Abdul Razak Dawood said "Apparel is the engine of growth in the textile sector and availability of yarn at competitive prices is the pillar of strength. All sectors have to play their respective roles to maximise overall exports,"
In another tweet Razzak said "MOC held a meeting of stake holders of spinners and apparel manufacturers to discuss availability of yarns and their prices. In light of rising prices MOC is considering reducing duties on various yarns and preparing a summary for the ECC".
Naseem told that 200 bales of Sanghar were sold at RS 8300 per maund, 3000 bales of Khairpur were sold at Rs 9000 to Rs 9200 per maund, 400 bales of Bagh Bahar were sold at Rs 9900 to Rs 9950 per maund, 600 bales of Marot, 400 bales of Hasilpur, 800 bales of Haroonabad, 400 bales of Fort Abbas, 400 bales of Faqeerwali were sold at Rs 9900 per maund, 200 bales of Chistian were sold at Rs 9850 per maund, 200 bales of Sadiaqbad were sold at Rs 9800 per maund, 1200 bales of Rahim Yar Khan were sold at RS 9800 per maund, 1000 bales of Mianwali were sold at Rs 9775 to Rs 9800 per maund, 600 bales of Fazilpur were sold at Rs 9500 to Rs 9600, 400 bales of Tunsa Sharref were sold at Rs 9525 per maund, 800 bales of Layyah were sold at Rs 9400 to Rs 9500 per maund and 400 bales of Khanewal were sold at Rs 9450 per maund.
He told that rate of cotton in Sindh was in between Rs 8300 to Rs 9300. The rate of cotton in Punjab is in between Rs 9400 to Rs 10,000. He also told that Phutti of Sindh was sold in between Rs 3700 to Rs 4600 per 40 Kg. The rate of Phutti in Punjab is in between Rs 4000 to Rs 5000 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 1700 to Rs 2000. The rate of cotton in Balochistan is in between Rs 9500 to Rs 9600 while the rate of Phutti is in between Rs 4700 to Rs 5100.
The Spot Rate Committee of the Karachi Cotton Association has decreased the spot rate by Rs 200 per maund and closed it at Rs 9700 per maund. The Polyster Fiber was available at Rs 158 per Kg.
Copyright Business Recorder, 2020
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