Prices firm on cotton market amid slow trading activity

LAHORE: The local market on Saturday remained steady and the trading volume remained satisfactory.

Cotton Analyst Naseem Usman told that rate of cotton in Sindh is in between Rs 20,800 to Rs 21,000 per maund. The rate of cotton in Punjab is in between Rs 20,500 to Rs 22000 per maund.

1200 bales of Tando Adam were sold at Rs 20,700 to Rs 20,900 per maund, 400 bales of Shahdad Pur were sold at Rs 20,700 to Rs 20,800 per maund, 400 bales of Sanghar were sold at Rs 20,600 to Rs 20,750 per maund, 400 bales of Hyderabad were sold at Rs 20,600 to Rs 20,800 per maund and 100 bales of Burewala were sold at Rs 21500 per maund

The Kappas of Winder was available at Rs 9500 to Rs 9550 per 40 Kg. The rate of Phutti of Sakran was in between Rs 9500 to Rs 9600 per 40 Kg. The rate of New Kappas of Vehari was in between Rs 9500 to Rs 10,200, rate of Kappas of Mian Channu was in between Rs 9600 to Rs 10,000, rate of Kappas of Khanpur was Rs 8890 while Kappas of Chichawatni was Rs 9600 to Rs 10,000 Kappas was Rs 9400 to Rs 10,600.

Textile and clothing exports grew 28.26 per cent year-on-year to $17.62 billion in the first 11 months of this fiscal year (11MFY22), mainly on the back of a massive depreciation in the rupee’s value and a steady rise in global demand.

According to data released by the Pakistan Bureau of Statistics (PBS) on Friday, the year-on-year growth rate in May was 56.02pc, the highest monthly growth rate.

The PBS data showed that ready-made garment exports jumped 30.63pc in value and 49.70pc in quantity during July-May, while the exports of knitwear edged up 36.44pc in value but dipped 4.34pc in quantity. Bedwear exports grew by 21.68pc in value and 15.19pc in quantity.

Towel exports were up by 21.66pc in value and 7.17pc in quantity, whereas those of cotton cloth rose by 26.81pc in value and 7.14pc in quantity.

Among primary commodities, cotton yarn exports increased by 24.18pc, and those of yarn made from material other than cotton increased by 109.68pc. The exports of made-up articles excluding towels rose by 15.19pc, while those of tents, canvas, and tarpaulin dipped by 2.16pc during the period under review. During the review period, the export of art, silk, and synthetic textiles increased by 29.36pc.

Textile machinery imports increased 47.24pc year-on-year to $722.605 million in July-May, reflecting textile industry expansion or modernisation.

To bridge the shortfall in the domestic sector, the industry imported raw cotton in July-May value, which posted an increase of 25.28pc, while the import value of synthetic fibre posted a growth of 19.29pc, followed by the import of synthetic and artificial silk yarn, which posted a gain of 28.80pc during the months under review.

In 11MFY22, imports of used clothing increased by 46.90pc compared to the same period last year.

During the 11-month period, the country’s overall exports posted a year-on-year growth of around 27.90pc to reach $28.87bn up from $22.57bn in the same period last year. The government has projected a target of $31bn for 2021-22.

The government has already unveiled a textile and apparel policy last month with various measures to promote production as well as quality of textiles and clothing. In the budget 2021-22, the government drastically reduced duties and taxes on the imports of several hundred raw materials to bring down the input cost of exportable products. Liquidity issues were also resolved to a considerable extent by the timely release of refunds, customs rebates and the payment of cash subsidies.

Saqib Naseem, Chairman Pakistan Yarn Merchants Association (PYMA), and Muhammad Junaid Teli, Vice Chairman, Sindh & Balochistan region, have drawn attention of Minister for Finance & Revenue, Miftah Ismail over anomalies in federal budget 2022-23.

They elaborated that polyester filament yarn (HS Code 5402.3300, 5402.4600, 5402.4700 and 5402.5200), also known as man-made yarn, is the basic raw material for Pakistan’s textile industry. The share of cotton in global fiber consumption has fallen from nearly 70 percent back in 1960, to only 27 percent by end-2020. Its place has now been captured by synthetic or man-made yarns.

“A very large SME sector of Pakistan’s textile industry (more than 500,000 looms and knitting machines) consumes polyester filament yarn. The commercial importers of polyester filament yarn act as financiers to this SME sector and entertain the requirements of this SME sector using their own capital and resources”, they said.

Saqib Naseem, Junaid Teli added that we have seen in the past that whenever the difference in WHT is more than one percent on commercial imports v/s industrial import, majority imports of polyester filament yarn shift towards industrial imports which leads to corruption and misuse of this facility and to the exchequer.

They further said that polyester filament yarn falls under the category of raw materials (SRO 1125) and in the previous budget FY 2021-22, the government imposed WHT at import stage one percent for industrial importers and two percent on commercial. However, in the federal budget 2022-23, the government has kept WHT at one percent for industrial imports falling under SRO 1125 whereas commercial importers shall be charged WHT at 3.5 percent with MTR and at 4 percent with FTR. Polyester filament yarn tariff already exists in the cascading system of polyester value chain and it is already on the higher side.

Saqib Naseem, Junaid Teli urged Minister for Finance & Revenue, Miftah Ismail to kindly continue with two percent WHT with FTR on commercial imports on items falling under SRO 1125. Furthermore, in view of information from reliable sources, it has been learned that the government may impose ACD & RD on polyester filament yarn (HS Code: 5402.3300, 5402.4600, 5402.4700 & 5402.5200).

Since these are basic raw materials of the textile industry, therefore we are requesting you not to impose any ACD and RD on these HS Codes. We would also request you to rationalize Customs duty tariff of Poy (5402.4600) & Polyester Filament Drawn Yarn (PFDY) at seven percent instead of present 11 percent.

The Spot Rate of new cotton remained unchanged at Rs 20,600 per maund. The Polyester Fiber was available at Rs 310 per kg.

Copyright Business Recorder, 2022