Spot rate unmoved amid listless business activity

LAHORE: The local market on Tuesday remained bearish and the trading volume remained low.

Cotton Analyst Naseem Usman told that rate of cotton in Punjab and Sindh is in between Rs 21000 to Rs 22,000 per maund. He also told that rates of cotton and Phutti witnessed a decrease of Rs 1000.

The new Kappas from Digri, Tando Ghulam Ali was available at Rs 9000, the rate of New Kappas from Tando Bago, Kadan, Talhar was Rs 9500 while the rate of New Kappas from Badin, Gularchi, Sajawal, Chor Jamali was Rs 9800,

Kappas of Mir Pur, Sakro, Gharo was sold in between Rs 8700-8800, the rate of new Kappas of Kunri was Rs 8500-9000 and Ghadoo, Nawan Kot Rs 9000-9200.

The cultivation of cotton has been completed over 1.936 million hectares of land in the potential areas countrywide against the target of 2.32 million hectares for the current season (2021-22).

The crop sowing witnessed about 6.9% decline as compared to the last season of over 2.078 million hectares, said an official of the Ministry of National Food Security on Monday.

Talking to APP, he said that according to the provincial agriculture extensions and crop reporting services, the countrywide cotton sowing target for the season was achieved by 83.4%.

There was 25.05% increase in the crop sowing in Sindh, 12.3% in Balochistan, and 54.5% in Khyber Pakhtunkhwa, he added. However, the cotton sowing in Punjab during the period under review registered about 17.3% negative growth, owing to drought and dry weather at the start of the sowing season, he said.

The cotton crop was sown over 1.279 million hectares of land across Punjab, 79.4% of the target of 1.61 million hectares, the official added.

Likewise, he said, the cotton crop was cultivated over 0.594 million hectares, 92.8% of the target of 0.64 million hectares in Sindh.

The provinces of Balochistan and Khyber Pakhtunkhwa met 91.4% and 7.73% of their respective sowing targets of 0.64 million hectares and 0.00017 million hectares, the official added.

He mentioned that the cotton production target for the season was fixed at 11.034 million bales, based on yield of approximately 740 kg per hectare.

The Ministry of National Food Security and Research, he said, had also proposed to revise the intervention price of seed cotton (Phutti) to Rs 6,000 per 40 kg for the crop season 2022-23 in order to ensure proper rate of return to the farmers.

Prime Minister Shehbaz Sharif has directed concerned ministries to convene meetings of relevant stakeholders for consultation on revision of seed-cotton support price, finalization of mechanism for application of Weighted Average Cost of Gas (WACOG) and processing of applications for Extension of Load (EoL) and new connections of electricity.

Prime Minister Office (PMO) issued these directions to Ministry of National Food Security and Research, Petroleum Division, Power Division and Ministry of Commerce, in response to a letter written by All Pakistan Textile Mills Association (APTMA).

PMO has also advised APTMA to approach National Tariff Commission (NTC) with regard to their grievances against anti-dumping duty on polyester staple fibre, under prevalent rules/ policy.

PMO has also directed that consultation be undertaken with relevant stakeholders to examine the proposals of Power Division on disbursement of subsidy to export oriented sectors.

APTMA, in its letter to the Prime Minister, shared proposals for sustaining and accelerating textile exports.

On APTMA proposal regarding announcement of a cotton support price of Rs. 8000 per maund of Phutti for the upcoming season, Ministry of National Food Security and Research stated that the Intervention Price Policy 2021-22 though approved late (August) in the season resulted in better crop management by growers and improved production despite a decline in area under cultivation compared to last year. In lieu of this result the government has approved the intervention price policy before the start of sowing season (March) to influence growers’ decision with respect to cotton planting.

Ministry argues that the intervention price already approved is being revised with the consent of the Government to lure more farmers towards cotton cultivation.

On APTMA’s proposal regarding announcement of cotton support price of Rs 8,000 per maund of Phutti for the upcoming season, Commerce Ministry commented that in order to revive cotton production, Ministry of National Food Security and Research (MNFSR) has submitted a summary to ECC of the Cabinet and proposed ”to set threshold intervention price of seed-cotton at Rs. 5,700/ 40 kg, trigger the intervention price of seed-cotton at 10 per cent discount of the estimated import parity price using the Cotlook A-Index when domestic prices drop below this threshold and provide a cash credit limit to Trading Corporation of Pakistan (TCP) to procure two million bales at intervention price”. The ECC of the Cabinet approved the summary submitted by the MNFSR on March 17, 2022 and the decision was ratified by the Cabinet on March 17, 2022.

The Spot Rate remained unchanged at Rs 22500 per maund. The Polyester Fiber was available at Rs 305 per kg.

Copyright Business Recorder, 2022