KARACHI: Bullish trend continued in the cotton market. The Spot Rate after increasing by Rs 300 per maund reached at the highest level. Seventy five lac bales will be produced this year while the demand of the textile sector is of one Crore seventy five lac bales.
Around seventy five lac bales will have to be imported. So far now import agreements of fifty lac bales have already been signed. It is expected that textile exports will be affected due to energy crisis. All Pakistan Textile Mills Association is protesting against the energy shortage. Pakistani export of textile products has crossed that of India and Bangladesh.
The bullish trend remained continued in the local cotton market due to the cautious buying by the textile mills and selling of cotton on high rates by the ginners. The rate of quality cotton remained in between Rs 19,500 to Rs 20,000 per maund. The stock of cotton is decreasing due to which the trading volume is also on the decrease.
An international company is selling cotton from their stock on daily basis that is why the stock of cotton is decreasing gradually. According to the sources, after February, cotton will not be available while the arrival of new crop of cotton will partially start from June.
Although, it is expected that cotton farmers will start sowing before time because this year they got a good price of their crop, it is expected that arrival of Phutti may start by the end of the month of May.
Seed cotton (Phutti) equivalent to over 7.3 million or exactly 7,384,040 bales have reached ginning factories across the country till January 15, registering an increase of 34.42 percent as compared to the figures of the corresponding period of last year.
According to a fortnightly report of Pakistan Cotton Ginners Association (PCGA), over 7.3 million or 7,384,040 bales have undergone the ginning process, i.e., converted into bales.
According to the APTMA sources this year the demand of cotton will be one Crore seventy five lac bales because of the establishment of new spinning mills while seventy five lac bales will be produced in the country. In this way, seventy five lac bales will be imported from abroad to meet the demands. Importers of cotton till now have signed agreements for fifty lac bales.
According to them in international cotton market, especially in New York Cotton Market, the rate of Future Trading after increasing reached at 125 American cents, which is the highest in eleven years. This rate is now at 121 American cents due to which textile mills were off and on signing import agreements.
On the other hand, local textile mills were distributed due to uncertainty in the rate of US dollar, as well as, due to the threat of Omicron and delays in shipments. Moreover, financial crunch is increasing day by day due to increase in the prices of cotton in the local cotton market. According to the APTMA sources, cotton-yarn parity has been decreased due to the unprecedented increase in the rate of cotton. The rate of yarn is not increasing as compared to the rate of cotton.
The rate of cotton in Sindh as per quality is in between Rs 16,000 to Rs 20,000 per maund. Phutti is almost over. The rate of cotton in Punjab is in between Rs 17,000 to Rs 20,000 per maund. The rate of Phutti is in between Rs 6500 to Rs 8600 per 40 Kg.
The increasing trend in the rate of Banola and Khal remained continued. Phutti and Cotton in Balochistan were almost over. The Spot Rate Committee of the Karachi Cotton Association increased the spot rate by Rs 300 per maund and closed it at Rs 19300 per maund.
Chairman Karachi Cotton Brokers Forum Naseem Usman told that after fluctuation in the international cotton markets, the bullish trend remained prevalent in the local market. The rate of Future Trading of New York Cotton after reaching at the highest level of 125 American cents closed at 121 American cents.
According to the weekly export report of USDA more than two lac seventy three thousand bales were sold which were thirty two percent low as compared to the sale of the last week. Pakistan was on number one with sixty two thousand and six hundred bales, China was on number two with sixty two thousand and two hundred bales and Bangladesh was on number third with twenty eight thousand bales.
The rates of cotton in Brazil, Central Asia and Sudan were remained stable overall while the production of cotton in India is expected to be twelve lac bales less as compared to the initial estimates.
President Cotton Association of India Atul Ganatra in its statement said that 13.360 lac bales will be produced in the country but due to rains and attacks of Pink Ball worm crop was affected. Up till now the revised estimates were of 348.13 lac bales. He also said that demand of cotton was also increased by ten lac bales that was earlier 335 lac bales but now it is 345 lac bales.
Pakistan’s export to America was continuously increasing. In the first six months of the current year fifty percent increase was recorded. According to the exporter of value-added sector in Karachi, Javed Balwani, this increasing trend has been continued for the last many months.
According to a textile mill owner Yasin Sidiq the yarn prepared in his factory is exported to America, adding that his yarn export witnessed an increase of twenty five percent during the last six months.
The United States remained Pakistan’s largest export market, with $607 million worth of goods exported to the country in December 2021, showing a growth of 43 percent on a year-on-year basis. Advisor to the PM on Commerce and Investment, Abdul Razak Dawood shared this in a tweet on Tuesday, saying that Pakistan’s exports in December 2021 have seen a rise as compared to the same period last year.
He said the US was followed by China as Pakistan’s second-largest exporting destination, with the country purchasing goods worth $325 million in December 2021, an increase of 25 percent.
Pakistan exports home textile, women and men wear and yarn to America. In the fist six months Pakistan’ export to America was more than 15 billion dollars. According to the report Pakistan has left India behind in textile and garments export to America.
However, Khawaja M. Zubair, Chairman, The Karachi Cotton Association, has expressed his concern over the low gas pressure and closure of gas supply to the EOS (export oriented sector) of Sindh and Balochistan, which are contributing more than 52 percent in total textile exports of Pakistan.
He observed that due to extremely low gas pressure and frequent unavailability of gas supply to the EOS located in Sindh and Hub area of Balochistan, it has become very difficult to run the industry.
He also observed that despite the Government’s intention to facilitate the EOS with a view to boost exports and earn valuable foreign exchange for the country, they are not being provided full and uninterrupted supply of gas; resultantly, the EOS of the above referred two provinces are unable to achieve their production target and fulfil their export commitments due to which their foreign buyers might likely to divert their orders to other countries.
With a view to save the EOS of Sindh and Balochistan from total closure, Khawaja M. Zubair urged the Government to immediately intervene in this serious matter of national interest and issue directive to the gas supply companies to provide gas first to the EOS including textile industry enabling them to meet their production target, fulfil their export commitments without any disruption and continue to play their important role in the growth of country’s economy.
The All Pakistan Textile Mills Association (APTMA) has urged Prime Minister Imran Khan to intervene and save the export-oriented textile industry of Sindh and Balochistan from total closure. The export-oriented textile industry of the two provinces has come to almost standstill due to gas shortage.
Asif Inam, Chairman APTMA Southern Zone has said that export-oriented textile industries of Sindh and Balochistan are contributing more than 52 percent in total textile exports of Pakistan, but they are deprived of gas supply despite the government vision of the higher priority of gas supply to the export-oriented industries as compared to other industries. He further said that industries of Sindh and Balochistan are denied their legal right to gas supply although they are self-sufficient in production of the natural gas.
He said that due to extremely low gas pressure and frequent unavailability it is very difficult for the export-oriented textile industries located in Sindh and Hub Industrial Area to run the mills and fulfil their export commitments well in time.
Chairman APTMA Southern Zone said that despite Balochistan High Court’s order, industrial units located in the Hub Industrial Area since last two months have been getting only 25 percent gas pressure which is inadequate to run the industry. He has urged the government and gas supply companies to provide gas first to export-oriented industries including textile to run their mills without any disruption so that they can fulfil their export commitments in time; otherwise, export-oriented textile industry would be compelled to shut their factories as they have already been incurring heavy financial losses due to unavailability of gas.
Asif Inam has also requested the Prime Minister Imran Khan to intervene and resolve the gas issue so that industries can continue their normal operation.
Copyright Business Recorder, 2022
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