KARACHI: The local cotton market on Friday witnessed sluggish trend. Market sources said that trading volume remained very thin. The situation is likely to be improved in the month of June after the start of new season.
Cotton Analyst Naseem Usman told Business Recorder that with the partial arrival of Phutti for the season 2021-22 the trading for the new season has started in the cotton market. Naseem said that 600 bales of Tando Adam were sold at Rs 12,200 per maund and 200 bales Sanghar were sold at Rs 1200 per maund.
Naseem also told that that Spot Rate Committee of the Karachi Cotton Association will mention the trading activates in its daily report from July 1, as the financial year starts from July. Central Cotton Institute Multan has introduced low cost and environment friendly cotton producing technology.
According to the director Central Cotton Institute Multan Dr Zahid Mahmood this technology has been named as Low Expenditure and Environment Friendly Tech (LEEF TECH).
Federal Minister for Finance and Revenue, Shaukat Tarin said that the growers would get 35-40 percent higher return of their agricultural produce by eliminating the role of middlemen.
He made these remarks while chairing a meeting with SAPM on Food Security Jamshed Iqbal Cheema on Farm Gate Pricing at the Finance Division. SAPM on Revenue Dr Waqar Masood, Secretary Finance Division and Additional Secretary, Ministry of National Food Security and Research also participated in the meeting. The meeting reviewed the existing farm gate price mechanism and the problems faced by the farmers in transporting the perishable commodities particularly vegetables and fruits to the nearest market or first point of sale.
The role of middleman, who makes money at the expense of farmers particularly those with small and marginal land holdings, was also discussed during the meeting,
In his remarks, the finance minister stated that achieving economic sustainability is the biggest challenge in the field of agriculture. There is a need to boost farm productivity by facilitating farmers through interest-free agri loans so that they get fair share of their produce. The dominance of middlemen needs to be curtailed effectively. By eliminating the role of middlemen, the growers would get 35-40% higher return of their agricultural produce, he added.
Naseem Usman told that up till now buying and selling of Phutti from the areas of Sindh which includes Badin and Gharo were recorded. He told that ginning factories of Punjab bought Phutti at the rate of Rs 5300 to Rs 5500 per 40 Kg. Moreover, a ginning factory of Burewala had sold 200 bales of cotton at the rate of Rs 12500 per maund on the condition of delivery between June 10 to June 20. Sources claimed that two ginning factories of Sanghar will partially start their operations from 1st week of June.
Naseem told that according to the information received up till now the sowing of cotton in the cotton production areas of Sindh and Punjab is satisfactory. The Federal Agriculture Committee has set the target of production of approximately one crore five lac bales for the year 2021-22.
Naseem further said that that sowing of cotton has registered a significant increase this year in South Punjab due to the incentives given to the farmers by the Punjab government, said an official of the Punjab Agriculture Department.
Official said it was heartening to note that the farmers were taking keen interest in sowing cotton this year as compared to last year. "Reports of cotton crop sowing are pouring in from the South Punjab, right from the first week of April which are according to the wishes of the Punjab government", the official said.
He said that crop of cotton was mostly being sown in Bahawalpur, Multan, Lodhran, Bahawalnagar and Rahimyar Khan Khanewal, Layyah, Sahiwal districts. Mahar Mahboob, a farmer from Layyah, said that he preferred to sow cotton in fields this year rather than other crops, adding that the present government was taking initiatives for the farmers.
To a question, he said that cotton was a beneficial crop as the government was giving different incentives to the farmers. He also confirmed that the farmers were taking more interest in sowing the cotton as compared to the last year in the southern Punjab.
It is also pertinent to mention here that the Federal Committee on Agriculture has fixed white lint production target for the country at 10.5 million bales from an area of 2.33m hectares for the 2021/22 season, almost double over the previous year.
Punjab is to sow the crop on 1.6m hectares of land to produce 6.07m bales. The Agriculture Department has issued a schedule for sowing of registered cotton varieties and advised the growers to complete the sowing of registered BT cotton varieties between April 1 and May 31. The BT cotton varieties recommended by the department include IUB-13, MNH-886, BS-15, Niab-878, and FH-142. The growers have been asked to consult local experts if they plan to sow other registered BT cotton varieties keeping in view the environment of their district to get better production.
ICE cotton futures fell on Thursday as recent rains in West Texas overshadowed a weekly federal report showing higher export sales. Cotton contracts for July fell 0.64 cent, or 0.8% to 82.28 cents per lb by 1:03 p.m. EDT (1703 GMT). They traded within a range of 81.75 and 83.79 cents a lb.
Showers in the top-cotton producing West Texas region over the past few weeks have increased the possibility for an improving crop.
While the weather in July is uncertain and forecasts project less rainfall in the next 10-days, current precipitation is enough to help cotton planting in both West Texas and the Rio Grand Valley, leading the market lower, said Rogers Varner, president of Varner Brokerage in Cleveland.
Varner however noted that net sales and exports in the US Department of Agriculture's (USDA) weekly export sales report were a positive.
The report showed net sales almost doubled at 108,000 Running Bales (RB) for 2020/2021 from the prior week and exports also rose 25% to 345,400 RB.
Cotton prices are likely to move sideways in the near-term and are likely to be helped by planting in south-east US shifting mainly from cotton to soyabeans and to wheat and grain sorghum in West Texas, said Louis Barbera, partner and analyst at VLM Commodities Ltd
Certificated cotton stocks deliverable as of May 19 totalled 121,620 480-lb bales, up from 112,318 in the previous session. The spot rate remained unchanged at Rs 11300 per maund. The Polyester Fibre was available at Rs 200 per kg.
Copyright Business Recorder, 2021
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