KARACHI: The rate of quality cotton reached Rs16700 per maund while the spot rate reached an all-time high of Rs15900 per maund. The government should take steps to increase the production of cotton on war footings. Seventeen percent sales tax on Banola should be abolished. Pakistan Cotton Ginners Association and All Pakistan Textile Mills Association are actively playing their role in increasing the production of cotton in the country.
During the last week local cotton market remained bullish and the trading volume remained satisfactory because textile and spinning mills remained involved in buying throughout the week while the ginners were not interested in stocking the cotton when they were getting good rates.
The spot rate is increasing day by day and the rate of quality cotton M-Pri has crossed Rs16700 per maund while the rate of Phutti of Balochistan has crossed Rs8200 while the spot rate reached at Rs15900 per maund which is highest in the history.
The Rate of Promise (Waday Ka Bhao) of New York Cotton after fluctuation overall reached at the level of 1.18 cent per pound. Bullish trend remained continued in international cotton market especially the rate of cotton in India reached at 67000 per candy (356 kg), which is highest in history.
The rate of cotton remained high despite strengthening of Pak Rupee against dollar. If the rate of dollar declined further then there are chances that big textile mills would show interest in importing cotton but due to the fluctuations in both the rate of dollar and the New York Cotton textile spinners and value-added sector are hesitant to sign any agreement and they had adopted a cautious behaviour. However, due to low cotton production in the country cotton will be imported from abroad to meet the demand of local industry. In this way the value-added sector has to import cotton so both the parties are worried to some extent.
Positive news regarding expansion of textile sector are coming due to which it is expected that rates of cotton may increase but both textile and private sector are looking towards government for increasing the production of cotton. It is feared that if the bullish trend remained continued in the rate of cotton internationally then it is feared that it will have a negative impact on local textile industry.
It is a high time that textile sector should think that how long will we depend on imported cotton.
The fact is that Pakistan has the potential of increasing the cotton production and it has produced more than one Crore four lac bales, one or two times. Government and textile sector are working to increase the production of cotton in the country but it is unfortunate that All Pakistan Textile Mills Association is not paying cotton cess which is fixed for cotton research. Sources in Central Cotton Research Institute claimed that biggest cotton research institute was facing a severe crisis. It was sponsored by APTMA and comes under the Ministry of Food and Research, which works to increase cotton production. It is an important institute run on cess money paid by APTMA. APTMA paid Rs50 per bail as cess but APTMA had not paid cotton cess of worth around rupees two billion and eighty Crore since 2017 and they had taken a stay order on it from the court.
The research institute is facing serious financial crunch due to non payment of cotton cess by APTMA.
Sources in the institute said that the wages of the employees had not been increased since 2017 while employees were not getting ad-hoc relief announced by the government of Pakistan. The institutes annual expenses were around Rs40 to Rs50 Crore. There were no new appointments for the last ten to twelve years. The institution needs 750 employees but it has only 266 employees. In 2021-22 the institute prepared six new varieties of seeds.
According to the sources newly elected chairman APTMA Abdul Nasir has promised that association is ready to pay cotton cess amount of more than Rs2 billion in twelve instalments.
The rate of cotton in Sindh as per quality is in between Rs 12500 to Rs 16700 per maund. The rate of Phutti is in between Rs 4500 to Rs 7000 per 40 kg. The rate of Banola is in between Rs 1350 to Rs 2000 per maund.
The rate of cotton in Punjab is in between Rs 14400 to Rs 16500 per maund. The rate of Phutti is in between Rs 5800 to Rs 7500 per 40 kg. The rate of Banola is in between Rs 1550 to Rs 2100 per maund.
The rate of cotton in Balochistan is in between Rs 13700 to Rs 16000 per maund. The rate of Phutti is highest and is in between Rs 6200 to Rs 8200 per 40 kg and the rate of Banola is in between Rs 1600 to Rs 2200 per maund.
The Spot Rate Committee of the Karachi Cotton Association increased the spot rate by Rs500 per maund and closed it at Rs15900 per maund.
Chairman Karachi Cotton Brokers Forum Naseem Usman told that overall a bullish trend prevails in international cotton market. He said after fluctuation the Rate of Promise (Wadsy Ka Bhao) of New York Cotton reached at 1.16 cent per pound from 1.18 cent per pound.
As per weekly USDA export report more than one lac thirty nine thousand bales were sold which is 61 percent less as compared to last week. This time too China was the biggest buyer with more than 44000 bales. India was on number second with more than 24000 bales while Turkey was on number third with more than 23000 bales.
Increasing trend was witnessed in the rate of cotton in Brazil, Central Asian states and Africa while the bullish trend remained continued in the rate of cotton in India. In India the rate of cotton quality of Shankar 6 crossed Rs67000 (356 kg) per candy.
Group leader APTMA Goher Ejaz in an interview said that machinery of worth Rs450 billion is being imported. In the first four months of this fiscal year textile exports has crossed 6 billion dollars. He said 30 lac people will get jobs as a result of investment of Rs5 billion in 100 projects.
He told that in 2018 textile exports were 13 billion dollars and by the end of this year it is expected that it will cross 21 billion dollars. He hoped that by June 2023 our exports will cross 26 billion dollars.
Moreover, chairman PCGA Sohail Mehmood Harl in an interview said that cotton production is improved as compared to last year. Moreover, a bullish trend is prevailing in local and international cotton markets.
Cotton growers benefited from increased prices so it is expected that in the next season they will grow more cotton.
There are various benefits of growing cotton crop. It is the raw material of textile mills. Edible oil is obtained. Animal feed is also obtained from this crop.
Sohail further said that concerned departments are not taking interest in increasing the production of cotton. He demanded that government should withdraw 17 per cent sales tax on edible oil.
Cotton arrivals in Pakistan have increased by 81%, showed the latest data released by the Pakistan Cotton Ginner's Association (PCGA) on Wednesday.
As per the fortnightly report released by PCGA, total cotton arrivals in Pakistan surged to 6.257 million bales as of November 1, 2021, compared to 3.452 million bales in the same period last year, a difference of 2.804 million bales and a growth of 81.24%.
Weeks ago, the Ministry of National Food Security and Research said that the revised cotton production target of 9.3 million bales set for 2021-22 is expected to be met or even exceeded.
The Cotton Crop Assessment Committee (CCAC) in September 2021 had revised downward the cotton production target by 19.5% - from 10.5 million bales set for 2021-22 to 8.46 million bales, after missing the sowing target by 13.4 percent.
However, later in October 2021, the CCAC revised upward the crop production to 9.374 million bales for the crop season 2021-22. The sowing target was set at 2.310 million hectares; however, cotton was sown on 1.871 million hectares, i.e., 83.2 percent of the sowing target was achieved. Revised cotton target is likely to be met, says ministry
Meanwhile, as per the PCGA data, cotton arrivals reported a substantial increase in both Punjab and Sindh.
As of November 1, cotton arrival in Punjab was 2.935 million bales compared to 1.728 million bales in the same period last year, an increase of 1.206 million bales or 69.83%.
Similarly, cotton arrival in Sindh reached 3.321 million bales as compared to 1.724 million bales reported in the same period last year, an increase of 1.597 million bales or 92.67%.
At the same time, Pakistan's textile exports touched a historic high level during July to October period of the current fiscal year.
According to details, during the period in review, textile exports reached $6 billion, an increase of 27% compared to the same period last year. Textile exports in October also reached a new record and increased by 25.5% to $1.619 billion.
Chairman Karachi Cotton Brokers Forum Naseem Usman while commenting on the report said that it is expected that this year more than one crore 85 lac bales will be produced while the Cotton Crop Assessment Committee in its second meeting told that it is expected that 93 lac bales will be produced.
This will have to be reconsidered. Cotton quality is declining. Whitefly and Pink Ballworm are also attacking crops in many areas.
If 85 lac bales will be produced in the country then local mills will have to import 70 lac bales. The demand of local textile industry is of one crore 60 lac bales.
Copyright Business Recorder, 2021
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