KARACHI: The production of cotton was 14 lac and thirty thousand bales. During previous week there was stability in the rate of cotton and business was also satisfactory.
Though the quality of cotton was affected by rains but the crop remained safe. However, there is a complaint of attack of pests on standing crop. Towel Manufacturers Association of Pakistan Ali has expressed severe concern over the billions of rupees stuck up with the FBR, which is creating huge problems for the exporters.
In the local cotton market, there was a mixed trend in the price of cotton during the last week. The rate of cotton in the market was fixed as per quality because of the rain had affected cotton. There was a difference of Rs 400 to Rs 500 per Maund in the rate of cotton as per quality.
According to the information received, the cotton crop was slightly damaged by the rains, so its quality decreased in many areas. Overall, the crop remained safe and satisfactory.
The next few days may be difficult for the cotton crop as it is usually attacked by pest after the rains. Thus the farmers will have to be cautious.
Separately, the industrialists, especially the industrialists associated with the textile sector, have strongly opposed the exorbitant increase in electricity rates, terming the move as disastrous for business and industry.
The government has also added to the problem by increasing the prices of petroleum products by Rs 19.95 per litre.
It is being indicated that any further increase in the price of gas will lead to closure of more industries, due to which other industries particularly the textile industry will face severe difficulties. This will also have a negative impact on the rate of cotton.
The rate of cotton in Sindh as per quality was in between Rs 17,400 to Rs 17,800 per maund. The rate of Phutti was in between Rs 6,800 to Rs 7,800 per 40 kg. The rate of cotton in Punjab was in between Rs 17,900 to Rs 18,400 per maund and the rate of Phutti was in between Rs 7,000 to Rs 8,500 per 40 kg. The rate of cotton in Balochistan was in between Rs 17,600 to Rs 17,800 per maund while the rate of Phutti was in between Rs 7,000 to Rs 8,000 per 40 kg. The rate of Banola, Khal and oil remained stable.
The Spot Rate Committee of the Karachi Cotton Association kept the rate of cotton unchanged at 17,935 per maund.
Chairman Karachi Cotton Brokers Forum Naseem Usman has said that the rate of cotton in international cotton markets remained stable. The rate of Future Trading of New York Cotton witnessed a little bit increase.
According to the USDA’s weekly export and sales report, sales for the year 2022-23 were 9,900 bales. Japan was at the top by buying 1100 bales. Honduras was on number second with 500 bales. Vietnam was third with 400 bales. As many as 33,900 bales were sold for the year 2023-24. China was at the top by buying 18,300 bales. Mexico was remained second by buying 17,200 bales. Turkey bought 9,600 bales and came third.
Seed Cotton (Phutti) equivalent to over 1.4 million (1,428,638) bales have reached ginning factories across Pakistan till Aug 1, 2023 with major contribution of over one million bales recorded from Sindh owing to early picking and its Sanghar district alone attracting more than half of the total arrivals so far.
According to a fortnightly report of Pakistan Cotton Ginners Association (PCGA) issued to media, Punjab ginning factories recorded cotton arrival figure of 388,568 bales while arrivals to ginneries in Sindh recorded at one million plus (1,040,070) bales including 721,149 reaching ginneries in Sanghar district alone. Arrivals in Balochistan were recorded at 41,100 bales.
Out of the total arrivals, seed cotton converted into bales was recorded at 1.3 million (1,327,847) bales including 955,278 bales in Sindh and 372,569 bales in Punjab.
Due to Monsoon, and Ashura holidays, the arrival of cotton in ginning factories was affected in the last fifteen days. It is expected that the arrival of cotton will increase in the coming days.
Senior Vice Chairman of the Towel Manufacturers Association of Pakistan Syed Usman Ali has expressed severe concern over the billions of rupees stuck up with the FBR which is creating huge problems for the exporters. It is very important for the export-oriented sectors to get back their sales tax refunds timely as prescribed in the sales tax rules, i.e., within 72 hours as per Rule 39F of Sales Tax Rules 2006.
The textile exporters are highly perturbed over excessive and unreasonable delays in GST refunds which have been causing liquidity problems for the exporters of this country. Since July 2019 17 percent GST had been imposed despite stiff resistance from five zero-rated export sectors. Now the Pakistan government has enhanced the GST rate from 17 percent to 18 percent.
He further said that frequently exporters also face different issues in filing their monthly sales tax returns and they have to face unnecessary delays in the filing of their monthly returns, as well as, system deferred claim amounts of the exporters. This is creating agony for the exporters because already billions of rupees are stuck up with the FBR of the five zero-rated sectors. This critical situation is one of the main reasons behind the decline in our exports.
He also said that from time to time the different export-oriented associations have demanded that government must support the textile industry according to genuine considerations to their appeal for the restoration of the zero-rating status “No Payment No Refund system”; otherwise, upgrade the system to pay refund claims electronically, within 72 hours, without human intervention, on the submission of GD.
The exporters of this country are never interested in paying sales tax to the government of Pakistan and then begging for refunds which are the exporter’s own money. For the refund of GST amount, they are wasting their own resources, a lot of paperwork, huge investment on the equipment, etc. Their funds stuck up for several months create a financial crunch and they are paying high interest rate to the banks for borrowing money to fulfil their export orders, timely.
Copyright Business Recorder, 2023
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