LAHORE: The official spot rate Committee of the Karachi Cotton Association (KCA) on Saturday decreased the spot rate by Rs 500 per maund and closed it at Rs 21000 per maund.
The local market remained steady 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 spot rate witnessed a decrease of Rs 1500 per maund in three days.
The industrial sector that has been exempted from gas cuts got a direct hit on Thursday with curtailing of supplies to captive power plants.
According to an announcement, natural gas supply has been stopped to all captive power plants till further order. Earlier, gas quota of export-oriented industrial sector had been reduced to one-third, which invited severe criticism from textile sector.
The Gas/ Regasified Liquefied Natural Gas (RLNG) supply issues continue to plague captive plants of the export sector. The government gave them an assurance that the full gas supply would be restored soon. However, instead the government abruptly cut gas supply to one of the crucial sectors of economy, leaving mills effectively at operating 70 percent capacity.
Due to squeezing energy supplies, an export target of $21 billion has been revised downward to 20 billion dollars for the textiles and apparel industry for FY 2021-22. The textile sector’s expansion and opening of new factories was expected to propel exports further, but unfortunately these new units did not receive gas or electricity supply and were consequently unable to launch successfully.
All Pakistan Textile Mills Association Chairman Abdul Rahim Nasir Friday urged the government to “fully” support the export-oriented industry.
In a statement issued here, chairman APTMA said textile is the only sector that continues to grow and bring foreign exchange to the country, gearing up to close at $20 billion in June 2022 compared to $15.4 billion in June 2021.
Nasir said that sector has charted a remarkable performance in the past year. However, despite this progress, the gas/RLNG supply to the Punjab textile sector, which was at only 25% of required volumes (50% of August to November actual consumption), was shut down two days prior with the guarantee that supply would be restored on the morning of Friday 3rd June 2022. However, it has now been stated that the gas/RLNG supply will not be restored for an indefinite period.
The tragedy is that even with a 59% increase of textile exports in May 2022 ($1.69 billion) over May 2021 ($1.06 billion), exports are not being given their due importance. Gas/RLNG is being continuously supplied to non-export industries – ceramics, glassware, steel etc. and not the export sector, against all economic rationale.
The government’s decision to halt the supply of gas/RLNG to exporters is highly illogical as it is a critical input to textiles, the single largest contributor to Pakistan’s exports and the mainstay of Pakistan’s economic future.
The potential losses thus accruing to the shutdown of gas/RLNG supply are phenomenal. On the contrary, the industry can bring substantial economic benefit from enhanced exports if the stable and consistent supply of gas/RLNG is guaranteed. New plants and expansions completed since November 2021 are still awaiting gas/power supply.
Meanwhile, Saqib Naseem, Chairman Pakistan Yarn Merchants Association (PYMA) and Muhammad Junaid Teli, Vice Chairman, Sindh and Balochistan region have termed the sharp rise in prices of petroleum products by Rs 30, excessive power tariff and severe energy crisis as catastrophic for business and industry, and demanded from the government to save industries, especially SMEs, by significantly reduce petroleum products’ prices.
They also requested to reduce utility charges so that trade and industrial activities can be continued without any delay. They said that the business community is worried about as the SBP has already raised interest rates by 150 basis points (1.5 per cent) to 13.75 per cent, and along with the energy crisis, a sharp rise in petroleum product prices will now break the back of the business community. Therefore, any move that is detrimental to business and industry should be avoided.
Saqib Naseem and Junaid Teli demanded the government to withdraw the recent increase of Rs 30 in petroleum products to facilitate trade and boost trade activities, and take steps to overcome the energy crisis by reducing electricity and gas prices so that business and manufacturing activities can continue unabated.
The Spot Rate Committee of the Karachi Cotton Association on Saturday decreased the spot rate by Rs 500 per maund and closed it at Rs 21000 per maund. The Polyester Fiber was available at Rs 305 per kg.
Copyright Business Recorder, 2022
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