LAHORE: Only one deal reported on the cotton market on Thursday as the official spot rate maintained the overnight level at Rs 20,200 during the day. The fibre was available at Rs 263 per kg.
Cotton Analyst Nasseem Usman while talking to Business Recorder said that price of Punjab’s Phutti attracted per 40 kilograms prices from Rs 6500 to Rs 8900. Cotton of Sindh was traded from Rs 15500 to Rs 20,000 per maund, Punjab’s cotton was traded from Rs 16500 to Rs 20,000 per maund. He also told that 1200 bales of Rahim Yar Khan were sold at Rs 20,000 per maund.
The Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) has rejected the audit of duty drawback claims of the exporters, saying it is totally contradiction of Pakistan Customs, which claims to move towards automated clearance procedures as part of reform agenda, but simultaneously forcing the exporters to do more paperwork by sending notices to them despite the fact that all information of exporters are available in the system.
PRGMEA north zone chairman Sheikh Luqman Amin appreciated the efforts of Pakistan Customs to develop an e-commerce automated clearance facility in collaboration with the State Bank, saying the move has proved to be very effective for SMEs, helping them promote their business, especially in era of post-corona economic slowdown but it is unfortunate that Post Clearance Audit system is still manual, despite having all kinds of exporters information, creating problems for the industry.
The PRGMEA zonal chairman urged the Finance Minister Shaukat Tarin, FBR Chairman Dr Muhammad Ashfaq Ahmed and member Customs to stop the officials from harassment of taxpayers and withdraw all notices sent to the exporters. He regretted that instead of correcting the system digitally and making it more efficient and automated, the Customs has started sending notices manually, a way to open flood of corruption.
Meanwhile, Karachi Cotton Association has welcomed the government’s decision to form Pakistan Cotton Authority to ensure provision of quality seed, monitoring and enhancing the cotton yield with a view to increase production of cotton in the country.
KCA Chairman Khawaja M Zubair, in his statement also welcomed the government’s plan to create a Farmers’ Forum under Federal Ministry of Food Security and Research to ensure the representation of the farmers in policy making and for early resolution for their issues. Under this forum, national cotton conference will be held to address the difficulties and problems being faced by cotton trade.
He said the above decisions were in right direction and would help achieve sustainable growth in production of cotton and safeguard the interest of the cotton growers as future of the country depended on growth of agriculture specially of cotton.
The government should also focus on mobilizing all resources at federal and provincial levels to bring more area under cotton cultivation mainly in Balochistan to increase yield per acre to place a ban on cultivation of paddy or sugarcane and setting-up of sugar mills in the areas already earmarked for the cultivation of cotton to gear-up Pakistan Central Cotton Committee and all-cotton research institutes to evolve high yield and virus resistance cotton seed varieties for cultivation to take measures to import pure and certified pesticides in small packing instead of bulk to avoid adulteration to advise the cotton growers and the ginners to switch over to modern farming and ginning practices year after year to increase cotton production and improve quality of cotton to achieve the desired results, KCA Chief said.
A meeting of the Economic Coordination Committee (ECC) of the Cabinet has approved the revised Textiles and Apparel Policy, (2020-25) after incorporating certain amendments.
The meeting presided over by Minister for Finance Shaukat Tarin was submitted revised Textiles and Apparel Policy, 2020-25 by the Ministry of Commerce subsequent to incorporating a few changes along with the implementation report. When asked, an official on condition of anonymity said gas supply to the captive power plants has been defined by incorporating changes in the policy.
The ECC has postponed two summaries of the Power Division on its agenda with the first one regarding Settlement of Payables to Government-Owned Power Plants and other for reinstatement of tax on dividend for investors/shareholders of the IPPs.
APTMA is in a celebratory mood as Pakistan’s textile exports have surged 26 percent to $9.4 billion in the 1HFY22. Year-on-year basis, Pakistan’s textile exports surged 17 percent to $1.55 billion in January this year. The growth is being attributed to a shift in export orders from India and Bangladesh, as per a Business Recorder report. However, growth in textile exports is not confined to Pakistan alone. Even Bangladesh witnessed 41 percent Y-o-Y increase in textile exports in January ’22 and 28 percent in 1HFY22. The growth also resulted in the rise in the value of textile exports from these countries.
Over the last three years, yarn and cloth exports from Pakistan have declined while exports of knitwear and garments have increased. That is helping the country earn more foreign exchange. Pakistan is also benefiting from the shifting of global orders from China, currency adjustments, and energy subsidies. According to an IGC study, gas and electricity subsidies are helping boost Pakistan’s domestic textile sales. They are also encouraging spinners and weavers to add more value to garments. This is boosting the exports of garments and knitwear items from the country.
The end of gas subsidy has made gas supply erratic in Pakistan, especially during winters. Though this has not impacted export volumes yet, it has caused certain production losses that may impact textile exports in the future. To avoid losses, Pakistan needs to leverage the new investment-major share of both LTFF, and ERF. The country can take share from Bangladesh that offers cheaper transportation that may compensate for the energy cost disadvantage.
Spinners and weavers in Pakistan are demanding more gas subsidies as they are expanding operations. The country offers a competitive advantage over Bangladesh due to lower freight costs. However, to continue growing its textile exports, the government needs to ensure an uninterrupted supply of energy. It needs to speed up private supply in the LNG market. It has already initiated a proposal to construct a terminal and, is also working on certain practical supply solutions
The government can achieve external account stability by enhancing exports and making domestic industries competitive. It also needs to reduce its involvement in the energy market and encourage the supply of low-cost fuel.
ICE cotton futures fell 1% on Wednesday after the U.S. Department of Agriculture (USDA) raised U.S. ending stocks estimates for the 2021/22 crop year in its monthly supply-demand report.
In its latest World Agriculture Supply and Demand Estimates (WASDE) report, the USDA raised U.S. ending stocks estimates by 300,000 bales to 3.50 million bales. “The U.S. export forecast is lowered 250,000 bales to 14.75 million based on lagging shipments due to logistical issues,” the USDA said.
Copyright Business Recorder, 2022
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