LAHORE: The sluggish trend remained continued in the local market on Tuesday. Market sources told that market volume remained very thin.
ICE cotton futures edged higher on Monday helped by concerns over dry weather conditions in key growing areas, while a muted dollar lent further support.
The cotton contract for July rose 0.29 cent, or 0.4%, to 84.00 cents per lb by 12:35 pm EDT. It traded within a range of 83.35 and 85.04 cents a lb.
Dry weather continues to be a factor keeping the floor underneath this market, said Jon Marcus, president of Lakefront Futures and Options brokerage in Chicago.
However, “I don’t think you’re talking drought issues, otherwise the market would have catapulted way higher.”
Market participants now await the US Department of Agriculture’s weekly crop progress data due later in the day. On the technical front, “The July contract should experience resistance near 86.50 -87.00 and support near 80.00 and 77.00-78.00 over the near- to medium-term,” Louis Rose, director of research and analytics at Tennessee-based Rose Commodity Group, said in a note. The dollar lingered near an over six-week trough, lowering the cost of purchasing cotton for buyers holding other currencies.
Total futures market volume fell by 3,803 to 22,853 lots. Data showed total open interest fell 3,139 to 216,555 contracts in the previous session. Speculators cut net long position by 522 contracts to 53,410 in week to April 13, data from the US Commodity Futures Trading Commission showed on Friday
Cotton Analyst Naseem Usman told that Pakistan Cotton Ginners Association has not released the statistics of production of cotton on April 18 however, PCGA will release its final report regarding production of cotton on May 3.
Towel Manufacturers Association of Pakistan (TMAP) has commended the decision of federal government to withdraw duty on import of cotton yarn.
In a statement, TMAP appreciated the positive efforts of Prime Minister Imran Khan, Abdul Razzak Dawood, Adviser for Commerce, Textile, Industry & Production and Investment who presented the demand of the textile sector before the federal cabinet.
“Under the leadership of Imran Khan, the ECC accepted the demand and took a timely decision to allow duty-free import of cotton yarn which is the backbone of the textile sector,” TMAP declared.
Feroze Alam Lari, Chairman TMAP urged the government that relaxation of customs duty on import of yarn should not be for the limited period and should continue until the textile sector has sufficient cotton yarn and our cotton production is more than its consumption in the country as it was in the past.
He also stressed government to put a comprehensive ban on export of cotton yarn which is the life line for the value-added textile industry and compulsory for the flourish of the economy of the country.
“If the government withdrew this relief after the short period, it would result in shortage of cotton yarn in the domestic market, ultimately the result will have an adverse effect on the price of cotton yarn as well as badly effect on the export of textile industry which has share more than 65% of the total country export,” TMAP chairman stated.
Meanwhile, Engineer Bilal Jamil Senior Vice Chairman All Pakistan Bed sheets & Upholstery Manufacturers Association (APBUMA) has welcomed the decision to withdraw regulatory duty on the import of raw material.
In a statement issued here today, he said that availability of raw material is very important to continue the positive trend in the export of value added textile sector. He said that withdrawal of regulatory duty is actually in-line with the vision of Prime Minister Imran Khan to encourage exports in order to bridge the widening gap between imports and exports.
He particularly appreciated the efforts of Abdul Razak Dawood who personally took up this issue at the highest forum to ensure availability of yarn at reasonable rates in the backdrop of low cotton production in the country. However, he said that this decision will partially resolve the issue of yarn availability and the government must further facilitate this foreign exchange earnings and job creating sector.
He further said that it is necessary to achieve the projected target of textile exports to 46 billion dollars. He said that the Government should also take similar steps to ensure the availability of other raw materials used in the textile sector.
He also mentioned the impact of corona and said that the Government should ensure immediate payment of refund claims to resolve the liquidity problems faced by the exporters.
Naseem Usman told that federal government has started a process of cancellation of registration of 206 seed companies who were making substandard cotton seeds.
The country’s textile group exports have witnessed 9.06 percent growth during the first nine months (July-March) 2020-21 and remained at $11.355 billion compared to $10.412 billion during the same period last year, says the Pakistan Bureau of Statistics (PBS).
The exports and imports data released by the PBS revealed textile group exports have witnessed an increase of 9.85 percent in March 2021 as it stood at $1.355 billion compared to $1.234 billion during February 2021. Textile group exports have registered a growth of 30.38 percent on year-on-year basis as it reached $1.355 billion in March 2021 compared to $1.039 billion in March 2020.
Raw cotton exports registered 96.51 percent decline during July-March 2020-21 and remained at $0.593 million compared to $17.002 million during the same period of last year. Raw cotton exports remained zero during March 2021 and were also zero in February 2021.
Cotton yarn exports registered 12.03 percent decline during July-March 2020-21 and remained at $721.212 million compared to $819.808 million during the same period of last year.
Cotton yarn exports declined by 4.77 percent during March 2021 and remained at $114.523 million compared to $120.261 million during February 2021 and increased by 39 percent when compared to $82.39 during the same month of last year.
Naseem Usman said some media reports suggest that yarn prices have increased 7 to 10 per cent after refusal of import. Cotton’s rate in Sindh was in between Rs 10,200 to Rs 10400 per maund. The rate of Phutti in Sindh is in between Rs 4500 to Rs 5100 per 40 kg. The rate of cotton in Punjab is Rs 10,500 is 11, 000 per maund. The rate of Phutti in Punjab is in between RS 4,800 to Rs 6,000 per 40 kg.
Similarly, the rate of Banola in Sindh was in between Rs 1,600 to Rs 2,000 while the price of Banola in Punjab was in between Rs 1,800 to Rs 2,250. The rate of Phutti of Dalbadin Balochistan is available at Rs 5900 to Rs 6,000 per 40 Kg.
The Spot Rate remained unchanged at Rs 10,800 per maund. The Polyester Fiber was available at Rs 205 per Kg.
Copyright Business Recorder, 2021
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