KARACHI: Unprecedented fluctuation of Rs 3,000 per maund in the rate of cotton was seen previous week. There was a significant reduction of Rs 3,000 per maund in the spot rate, as the result of a significant decline in the rate of US dollar. The prices of cotton decreased because of decline in the prices of New York Cotton, as well as, due to the satisfactory production of cotton.
Attack of white flies in some cotton producing areas in Pakistan was reported and the farmers should be made aware of this.
Chairman Pakistan Cotton Ginners Association Waheed Arshad has said that the revival of the textile sector is the revival of national economy. He said fifty percent of ginning factories are inactive due to imposition of heavy taxes by TMA, and the farmers are facing difficulties.
In the domestic cotton market, cotton prices have been under pressure since the beginning of last week as textile spinners avoided buying, while ginners were trying to sell the commodity. A bearish trend prevailed in the market.
The price of cotton decreased from Rs 20,000 to Rs 21,000 per maund to Rs 17,000 to Rs 17,500 per maund and then again reached at Rs 18,000 to Rs 19,000 per maund. Due to the intervention of the government, the US dollar saw a significant decline in its value, while the rate of Future Trading of New York cotton also remained relatively low.
Textile spinners were involved in cautious buying because apart from the persistent increase in energy prices they ate facing looming threat of hike in interest rate. They were also worried about gas price hikes and supply shortages.
On the other hand, the Army Chief is holding meetings with the businessmen and industrialists. He is encouraging them, and giving briefings about the future projects. The businessmen and industrialists are appreciating the strategy and future planning of the army leadership. The positive impact of these meetings has now becoming visible.
However, as short-term measure energy problems should be solved, especially so that the textile sector can benefit from it as it will increase our exports.
According to the information received from different areas, the cotton crop is said to be satisfactory. However, farmers should be careful because in some areas the cotton crop was under attack of white fly.
The rate of cotton in Sindh after witnessing a significant decrease of Rs 2,000 to Rs 2,500 per maund reached in between Rs 17,500 to Rs 18,000 per maund. The rate of Phutti is Rs 8,800 after witnessing a decline of Rs 5,00 to Rs 7,00 per 40 kg.
The rate of cotton in Punjab is in between Rs 18,500 to Rs 19,000 per maund while the rate of Phutti is in between Rs 8,000 to Rs 9,500 per 40 kg. The rate of cotton in Balochistan is in between Rs 17,000 to Rs 18,000 per maund while the rate of Phutti is in between Rs 9,000 to Rs 10,000 per 40 kg.
The Spot Rate Committee of the Karachi Cotton Association decreased the spot rate by Rs 3,000 per maund and closed it at Rs 18,000 per maund.
Bearish trend also prevails in the rate of Banola, Khal and oil.
Chairman Karachi Cotton Brokers Forum Naseem Usman has said that mixed trend was seen in the rate of cotton in international cotton market. The rate of Future Trading of New York Cotton after reaching at 89 American cents per pound closed at 85.91 American cents.
According to the weekly export and sales report of 2023-24, 85,100 bales were sold. Mexico was at the top by purchasing 28,900 bales. Costa Rica came in second with 22,400 bales. China bought 16,200 bales and ranked third. Pakistan bought 6,300 bales and stood at the fifth position. Some 600 thousand bales sold for the year 2024-25. Pakistan was at the top by buying 1,100 bales. Mexico was second by buying 4,400 bales.
However, Syed Usman Ali, Senior Vice Chairman of the Towel Manufacturers Association of Pakistan has expressed serious concern over the statement of the caretaker Federal Minister of Commerce that more than 1,600 textile factories went closed in the country during the last 16 months.
Due to non-favourable conditions for the textile sector in Pakistan, most factories are working below their production capacity. Their main issues are high energy cost, two days a week closure of gas, besides very low gas pressure.
Additionally, textile exporters are grappling with the challenges posed by the sales tax refund system, which has resulted in a financial crunch, making it difficult for them to fulfil their export orders in a timely manner.
Everybody knows that the textile sector serves as the backbone of our economy. It is a valuable source of foreign exchange earnings, significant generator of employment which is creating the boom in economic activities.
Syed Usman Ali also expressed his dissatisfaction with the current government’s policies, which have failed to yield favourable results for the textile sector. He noted that our textile exports have been consistently declining and it is crucial to reverse this trend by taking immediate and positive measures to support the growth of textile exporters.
Meanwhile, due to the heavy taxes imposed on the ginning industry, more than fifty percent of the ginning factories in Pakistan are currently inactive, leaving farmers in a great difficulty to sell their cotton and textile mills also do not have an abundant supply of cotton. Also, the country’s economy is weakening due to spending billions of dollars annually on the import of cotton and edible oil.
Chairman Pakistan Cotton Ginners Association Waheed Arshad while talking to the office-bearers of PCGA at Rahim Yar Khan has said that currently there is 18% sales tax on ginning industry in addition to the income tax, due to which it has become almost impossible for the ginning industry to remain active. He asked that the federal government should immediately, as promised, abolish sales tax on cotton seed and cotton oil.
Apart from this, despite all the weather conditions being in favour of cotton, our cotton crop is facing serious problems, especially the attack of white fly. In these circumstances, a heavy responsibility is placed on the seed sector to introduce such cotton varieties in the coming years on which whitefly control is possible. Introducing the products in market that are effective against whitefly and also are not heavy on the farmer’s pocket is a must. Our country’s economy is related to cotton and a severe attack of whitefly as well as pink Ballworm on cotton crop may damage our economy.
Copyright Business Recorder, 2023
Comments
Comments are closed.