Cotton market: No visible change amid budget announcement

LAHORE: The local market on Friday 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 22000 to Rs 23,000 per maund.

A legislative body of Upper House of parliament on Thursday recommended fixing the minimum support price for the cotton at Rs 8000-9000. The recommendation was during Senate Standing Committee on National Food Security and Research, which held today in parliament house while Senator Syed Muzafar Hussain Shah was on chair.

The Ministry earlier informed that the minimum support price for cotton has been fixed at Rs 5,700, which the Chairman committee said was not enough to meet the requirement. The recommendation regarding fixing the support price will be taken up with the Economic Coordination Committee, the Ministry Informed.

Regarding the matter of fixing the minimum support price for the cotton, the Chairman Committee observed that non-fixation of the minimum support price for the cotton has forced the farmers to shift to other crops causing great loss to its production.

The panel head stated that cropping zones must be made and the federal government, being the coordinating and focal agency, should prevail upon the provinces to enforce the implementation of such zones. Otherwise, the committee fears that in the coming years’ cotton cultivation will further decrease causing a huge loss to the national exchequer.

Chair-man Pakistan Hosiery Manufacturers and Exporters Association (PHMA), Mian Kashif Zia while addressing a delegation of trade and investment officers, said that the widening gap between imports and exports is the biggest challenge for trade and investment officers. This can only be filled through close liaison and joint efforts with the stakeholders of the aided textile sector.

He said trade and investment officers serving as ambassadors to more than 50 friendly countries could play a significant role in boosting exports. He said that it was important for these officers to be in constant touch with the members of PHMA and hold monthly online meetings so that the joint efforts could help in increasing the exports of their country to the respective countries.

He said that we should reduce our dependence on foreign loans and increase value added textile exports, in order to earn valuable foreign exchange for the country; as countries which are economically strong are not only prosperous internally but they are also viewed with respect in the international community.

He said that the Ministry of Commerce should set targets for trade and investment officers and those officers who meet the annual export target in the respective country should be given special incentives so that Pakistan’s exports could be easily increased.

Mian Kashif said that the knitwear garments sector is not only a leader in the textile group but also provides employment to most of the people. He said that exports of knitwear in the textile group reached 3.8 billion dollars in 2020-21 and 4.2 billion dollars in 2021-22 (ten months) with an increase of 35 percent. Textile exports topped the list with exports of 15.4 billion dollars in 2020-21, while exports in 2021-22 (ten months) increased to 15.98 billion.

Mian Naeem Ahmed, former Chairman PHMA (North Zone), citing the example of Bangladesh, said that despite the fact that cotton production is not in the country, its exports have reached 45 billion dollars while Bangladesh’s target by 2023 is 80 billion dollars. 80 percent of which is in the textile sector.

He said that the main problem of our country is lack of consistency in policies. He said the textile sector is the backbone of our economy, which not only earns a lot of foreign exchange for the country but also provides employment to millions of people. Therefore, whatever the regime, the focus of our rulers should be on increasing exports.

Syed Zia Alamdar Hussain Former President Faisalabad Chamber of Commerce and Industry said that we should be allowed to import yarn from India through Wagah border which would not only make yarn available at cheaper prices but also reach our factories in less time.

Addressing the on the occasion, Commercial Counsellor of Afghanistan said that if coal was brought into the country through NLC containers, its price could be reduced from Rs53/Kg to about Rs35.

On behalf of the delegation of trade officers, Qamar Zaman thanked the PHMA members and said that the newly appointed trade officers would play a key role in exploring new markets and increasing exports. And will be in constant touch with all trade associations.

Mian Kashif Zia thanked the members of the delegation and expressed confidence that all the officers posted abroad would ensure the utilisation of all opportunities for trade and investment during their deployment abroad.

The most-active December cotton contract on ICE Futures rose 1.63 cents, or 1.33%, to 124.17 cents per lb as of 01:52 P.M. ET (1752 GMT). Weekly exports data from the United States Department of Agriculture showed net sales of 259,200 running bales (RB) for 2021/2022 were down 27% from the previous week, but up 96% from the prior 4-week average, including increases for China, with 114,500 RB.

China accounted for 66,100 RB of net sales of 102,900 RB for 2022/2023. “We had another round of good export sales. The bulk of the sales of the new crop were into China as well. What does that tell us? Other than China buying U.S. cotton, is this new business or are we looking at something else coming along?” said Jim Nunn, owner of Tennessee-based cotton brokerage Nunn Cotton. China is a top buyer of US cotton, so investors remain wary of fresh COVID-19 restrictions imposed in parts of Shanghai.

The Spot Rate remained unchanged at Rs 21000 per maund. The Polyester Fiber was available at Rs 310 per kg.

Copyright Business Recorder, 2022