KARACHI: The rate of cotton remained stable. Sale of quality cotton was almost over while the trading volume was low. The production of textile products was affected due to severe gas crisis. No action has so far taken on the appeals of All Pakistan Textile Mills Association for the restoration of gas supply to textile mills. There is a need to evolve a comprehensive strategy in future to increase production of cotton in the country.
In the local cotton market during the last week due to the cautious buying by the textile and spinning mills and due to the interest of ginners in selling trading volume of cotton business was seen shrinking. The main reason was that availability of quality cotton was very limited. Ginners were left with the stock of around one Lac fifty thousand bales. Moreover, an international organisation had also a limited stock of cotton. There will be no stock of cotton after February due to which the small mills have to look for other options.
On the other hand, big textile groups were signing agreements for the import of cotton but the production of textile mills was affected in many areas due to energy crisis, especially in Sindh and Balochistan, where supply of gas was curtailed to textile sector along with other industries.
All Pakistan Textile Mills Association (APTMA) has been appealing to the government for the last many days that supply of gas should be restored to the industry but the government is not listening to their appeals. On the other hand no parity exists between the prices of cotton and cotton yarn. A few days back power looms association of Faisalabad staged a protest against the skyrocketing prices of gas. They were closing down their looms due to high rates of gas.
The rate of cotton in Sindh is in between Rs 17000 to Rs 20,000 per maund while Phutti was not available. The rate of cotton in Punjab is in between Rs 18000 to Rs 20000 per maund while the rate of Phutti is in between Rs 7000 to Rs 8600 per 40 kg. Increasing trend prevails in the rate of Banola and Khal. Ginning factories in Balochistan were not operational.
The Spot Rate Committee of the Karachi Cotton Association increased the spot rate by Rs 100 per maund and closed it at Rs 19400 per maund.
Chairman Karachi Cotton Brokers Forum Naseem Usman told that overall a bullish trend prevails in the international cotton market. The Future Trading rate of New York Cotton after fluctuation remained high. According to the weekly sales and purchase report of USDA more than three Lac ninety thousand bales were sold which is 43 percent more as compared to the sale of last week. Vietnam was on number one with more than one lac thirty two thousand bales. India was on number two with more than sixty two thousand bales, China was on number third with more than fifty eight thousand bales, Bangladesh was on number fourth with more than thirty nine thousand bales and Pakistan was on number four with more than thirty seven thousand bales. More than one lac ninety nine thousand bales were exported which was forty percent less as compared to the figures of last week.
Increasing trend was witnessed in the rate of cotton in Brazil, Central Asia and Africa. In India bullish trend prevailed in the rate of cotton as twelve lac bales were less produced than the initial estimates and the demand increased by ten lac bales.
Separately, Council of Loom owners Association of Pakistan staged a protest under the leadership of their chairman Wahid Khaliq Ramay against highest power tariff. They protested by closing their mills against power hike and speculation in yarn rates.
The power looms owners held a protest demonstration in Faisalabad. They blocked Ghanta Ghar, a central point of the city, for any traffic and burnt tyres. They chanted slogans against the government for its ‘poor economic policies’.
While addressing the rally, Wahid Khaliq Ramay said that the government has failed to provide relief to any industry except export-oriented industry. He said dozens of power loom factories were shutting their operations because of skyrocketing power prices. He also said that textile-related businessmen have shown their serious concerns over the power looms closure issue. He said the prices of cloths would increase, resultantly. He also said due to closure of power looms hundreds of thousands of workers would become unemployed.
Pakistan had taken back its share of textile exports in international market after a decade and now there is a focus on increasing the share and in this regard exporters had invested five billion dollars in this industry. However, if Pakistan wants to achieve the export target of 21 billion dollars, it would have to solve the issue of cash flow faced by textile sector. Refunds of Rs 450 billion were still pending.
Patron in chief of Pakistan Textile Exporters Association Khuram Mukhtar said during an interview that overall loans of worth Rs 2200 billion were given to textile sector out of loans of Rs 387 billion given under ERF on subsidy which was nineteen percent of working capital while worth of refunds was more than that.
He pointed out that exporters were facing shipment problems with the increase of exports.
However, people related to cotton business were saying that from today government should focus on increasing the production of cotton in next season so that at the time of sowing of cotton farmers will not face the issues like fertilizer shortage.
Copyright Business Recorder, 2022
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