KARACHI: The local cotton market remained bullish on Saturday. Market sources told that trading volume is also increasing. Sources told that it is expected that rate of good quality cotton will reach at Rs 10,500 per maund in one or two days.
Cotton Analyst Naseem Usman told that Pakistan’s textile and clothing exports grew by 4.88 per cent year-on-year to $6.04 billion between July to November FY21 compared to $5.76bn in the same period last year, data released by the Pakistan Bureau of Statistics (PBS) showed on Friday.
In November, export proceeds were up by 9.27pc from a year ago. In October, export proceeds were up by 6.18pc and in September, they grew by 11.03pc while a decline of 15pc was recorded in August.
In the first month of the current fiscal year, exports recorded a robust increase of 14.4pc on a year-on-year basis. The rebound in exports of textile and clothing is the outcome of a series of incentives to support exporters to meet the challenges in the wake of the pandemic and disruption in supplies.
The demand for country’s exports had collapsed in months following March due to the Covid-19 pandemic, while there has been a gradual improvement since June from international buyers. Moreover, ICE cotton futures edged lower on Friday due to a stronger dollar, although a recent bullish federal export sales report and hopes for higher demand kept the natural fiber on track for its second straight weekly rise.
The cotton contract for March was down 0.15 cent, or 0.2%, at 77.04 cents per lb by 11:35 a.m. EST (1635 GMT). It traded within a range of 76.85 and 77.4 cents a lb. The contract is up more than 4% so far this week.
“The cotton market is strictly following the dollar today,” said Rogers Varner, president of Varner Brokerage in Cleveland.
Supporting cotton, the US Department of Agriculture’s (USDA) weekly export sales report on Thursday showed net sales of 402,900 running bales for 2020/2021, up 4% from the previous week and 44% from the prior four-week average.
The Ministry of Commerce, after revising the initial draft, has finally submitted the Textile Policy 2020-25 to the Economic Coordination Committee (ECC) of the Cabinet for approval.
Prime Minister Imran Khan had last month approved the five-year textile policy for onward submission to the ECC. However, the ministry was unable to oblige due to undisclosed reasons.
According to sources, the draft policy, prepared by the textile division of the ministry, would now be discussed in the upcoming meetings of ECC.
Under the new draft of five-year textile policy, the target of textile exports by 2025 has been set at $21 billion. The division also recommended provision of electricity to the sector at 7.5/kWh cents; RLNG at $6.5 per mmBtu; and domestic gas at Rs786 per mmBtu.
Other incentives in the proposed policy include unchanged Long-Term Financing Facility (LTFF) and Export Financing Scheme (EFS) rates; review of LTFF and refinance scheme for SMEs and indirect exporters; and launch of Brand Development Fund.
Cotton Analyst Naseem Usman told that the cotton production in the country witnessed an alarming decline of 2.8 million bales, according to a report released by Pakistan Cotton Ginners Association. The report says that more than 5 million bales were produced in the country which is 35.67 percent less as compared to more than 7 million bales produced till December 15 last year.
According to the statistics released by Pakistan Cotton Ginners Association till December 15 local textile mills bought more than 4.1 million bales which is around 35.06 percent less as compared to the last year buying of more than 6.5 million bales during this period. The ginners had the stock of more than 800,000 bales which is 35.06 percent less as compared to the last year stock of more than 1.2 million bales.
According to the report 384 ginning factories are running as compared to 424 ginning factories which were working last year during this period.
In Punjab 2.9 million bales were produced which is 1.4 million bales less as compared to the last years production of 4.4 million bales. In Sindh 2.8 million bales were produced which is 1.3 million bales less than the last years production of 3.3 million bales.
Naseem Usman while commenting on the report said that this year Pakistan’s textile sector is running on full capacity due to which the demand of cotton may reach more than 15 million bales. He told that around 6 million bales will be produced in the country around 7 million bales of around 6 billion dollars will have to be imported from abroad in order to full fill the demands of the local industry.
Naseem told that 800 bales of Khanewal were sold at Rs 9750 to Rs 10,300 (seed) per maund, 400 bales of Faqeer Wali were sold at Rs 10,000, 600 bales of Marrot were sold at Rs 10125, 400 bales of Yazman Mandi were sold at Rs 10020, 400 bales of Haroonabad were sold at Rs 10,000 and 2200 bales of Fort Abbas were sold at Rs 10,000. He told that rate of cotton in Sindh was in between Rs 9000 to Rs 10,000 per maund. The rate of cotton in Punjab is in between Rs 9500 to Rs 10,000 per maund. He also told that Phutti of Sindh was sold in between Rs 4000 to Rs 4700 per 40 kg. The rate of Phutti in Punjab is in between Rs 4000 to Rs 5200 per 40 Kg.
The rate of Banola in Sindh was in between Rs 1350 to Rs 1800 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 9200 to Rs 9500.
The Spot Rate remained unchanged at Rs 9850 per maund. The Polyester Fiber was available at Rs 168 per Kg.
Copyright Business Recorder, 2020
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