KARACHI: In the local cotton market during the last week some textile mills continued to buy cautiously, leading to an overall decline in cotton prices. The rate of new cotton dropped from Rs 14000 per maund to Rs 13200 to Rs 13300 per maund. More ginning factories are starting their operations due to increasing arrival of new cotton crop. According to information, up till now around 5000 bales of new crop have been delivered.
The rate of new Phutti was dropped by Rs 500 to Rs 800 per maund. In the same way the rate of Phutti which was in between Rs 6000 to Rs 6400, dropped by Rs 300 to Rs 400 and is available at Rs 5800 to Rs 6000. The rate of Banola which was in between Rs 2300 to Rs 2500 after decreasing reached at Rs 2000.
Although bullish trend prevails in the international cotton markets especially the New York Cotton Market and in Indian cotton market, the Karachi Cotton exchange is not issuing their spot rate of new crop because in Pakistan the new cotton season starts from July 1 so the cotton exchange will issue spot rate from July 1.
There were different estimates regarding production of cotton but according to the estimates of private sector, if the weather conditions remain favourable then 80 to 85 lac bales will be produced in the country.
The arrival of Phutti in Punjab is very slow. Factories in the province were taking Phutti from Sindh. The transportation charges of Phutti from Sindh to Punjab are in between Rs 100 to Rs 150 per maund.
The stock of old cotton is almost over in Sindh but in Punjab ginners still had the stock of 25000 to 30000 bales of old cotton. The ginners are not ready to sell it on low rate. The rate of old cotton in Punjab is in between Rs 13500 to Rs 14000 per maund but now some mills are taking interest in new cotton crop. Seven to eight mills are buying cotton from Sindh. It has been told earlier, that the rate of cotton is in between Rs 13200 to 13300 per maund and it is expected that rate will decline further.
In the same way the rate of cotton in Punjab is high as compared to the crop of cotton in Sindh because if cotton was transported from Sindh, they had to pay transportation charges and local mills of Sindh don’t have to pay much transportation charges so the rate of new cotton crop is high. Ginners are protesting against increase of GST ratio on raw and ginned cotton from 10 percent to 17 percent.
Chairman Pakistan Cotton Ginners Association Dr Jasu Mal said they are holding a press conference today (Monday) and if the government had not withdrawn the increase, ginners will shut their factories.
Karachi Cotton Brokers Forum chairman Naseem Usman told that bullish trend remained continued in international cotton markets. The Rate of Promise (Waday Ka Bhao) of New York Cotton reached at 87 cents after increasing. Moreover, increasing trend was witnessed in the rate of cotton in India. The reason behind increasing trend in the rate of cotton in India is that the stock of Cotton Cooperating of India has almost finished, now the millers have to buy cotton from ginners. The cotton brokers of India are saying that reason behind increasing prices is that textile mills need cotton so they ate purchasing it on high rates.
According to the weekly export report of USDA, exports decreased by 40 percent. This time Pakistan is on the top of the list with more than 47000 bales. The increasing trend was witnessed in the rate of cotton despite of the weather conditions and decrease in the rate of dollar.
According to the monthly WASDE report which was published showed more demand than its production. In the same way closing stock was less as it is expected due to which the rate of cotton increased. People are saying that in future the rate will not come down because last year due to COVID 19 demand was low due to which the market was in between 62-72-75 American cent due to which exports were increased especially Pakistani textile mills imported cotton in sufficient amount. It is expected that this year rates will be higher so it is expected that whatever deals Pakistani textile mills will finalise, they will do it thoughtfully. The mills who signed deals for the import of two thousand tons of cotton will decrease their import because of high rates.
Special Assistant on Food Security Jamshed Iqbal Cheema says government is taking effective measures to increase the production of cotton in the country.
In a statement, he said about 90 percent of cotton sowing target in Punjab and eighty percent in Sindh has been achieved.
The Special Assistant to the Prime Minister further said that sugarcane, maize and wheat have the highest production in the history of the country. He said that Rs. 1100 billion was transferred to the agricultural economy, which led to a historic increase in the income of farmers. Jamshed Iqbal Cheema also said that they are investing billions of rupees in livestock.
Farmers association and cotton growers Thursday proposed to the government to fix minimum support price (MSP) for cotton in the range of Rs 5,000 to 5,500 per maund.
Moreover, members of PCGA hold meeting in the factory of Daharki regarding increasing the production of cotton. They demanded that there should be complete ban on sowing of rice in cotton production area. They said last year government had imposed section 144 on growing rice in cotton production area due to which cotton production improved.
Last Tuesday, Prime Minister Imran Khan in his meeting with farmers said government was enforcing agriculture emergency in the country to give maximum benefits to the growers.
Copyright Business Recorder, 2021
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