KARACHI: The prices of cotton increased a little bit after slump. Punjab caretaker chief minister Mohsin Naqvi has asked the farmers not to sell Phutti at the price less than Rs 8,500 per 40 kg, fixed by the government.
Pakistan Cotton Ginners Association has appealed the government to purchase cotton through Trading Corporation of Pakistan (TCP). Farmers are distributed for not getting reasonable rates of Phutti and cotton. The government has not taken any practical step for providing relief to them. Ginners also are passing through a worsening crisis.
Nadeem Shah, Vice President of Sindh Abadgar Board has demanded that a meeting of Cotton Crop Assessment Committee should be convened immediately to determine the correct estimates of cotton crop.
Sources said that Federal Committee on Agriculture (FCA) has set a revised cotton target of 11.7 lac bales, amid continued decline in textile exports.
In the domestic cotton market, cotton prices continued to decline for the first two days of the past week, but on Wednesday due to the increase of three and a half rupees in the rate of dollar after a continuous of the last 28 days, the market started to stabilise. However, the business volume remained relatively low.
In fact, there is a severe financial crisis in the market due to a deep recession in the demand and price of textile products and cotton yarn. International textile markets are also in recession due to which the crisis like situation is increasing.
Textile mills are buying cautiously. If the US dollars remain strong, cotton prices will also be stable and if the value of dollar decreases then cotton prices will fall further.
Due to the critical condition of cotton and Phutti prices, both cotton farmers and ginners are worried.
Seed Cotton (Phutti) equivalent to near about six million (59,96,086) bales has already reached ginning factories across Pakistan till October 15, 2023.
According to the fortnightly report of Pakistan Cotton Ginners Association (PCGA) on Wednesday, Punjab ginning factories recorded cotton arrival figure of 25,43,100 bales while arrivals to ginneries in Sindh were recorded at 34,52,986 bales including 15,49,400 bales reaching the ginneries in Sanghar district alone.
Arrivals in Balochistan were recorded at 1,46,400 bales. Out of the total arrivals, seed cotton converted into bales was recorded at over 5.5 million (55,57,454) bales.
However, the caretaker chief minister of Punjab Mohsin Naqvi has announced that the farmers should not sell their Phutti below the intervention price of Rs 8500 per 40 kg under any circumstances.
The FCA has set the cotton production target of 11.7 lac bales after revising it from 12.7 lac bales. According to market estimates total production of cotton will be around 90 lac bales.
The rate of cotton in Sindh, as per quality, is in between Rs 13,000 to Rs 16,500 per maund. The rate of Phutti is in between Rs 5,000 to Rs 6,800 per 40 kg. The rate of cotton in Punjab is in between Rs 14,500 to Rs 16,400 per maund while the rate of Phutti is in between 6,000 to Rs 7,800 per 40 kg.
The rate of cotton in Balochistan is in between Rs 14,000 to Rs 15,000 per maund and the rate of Phutti is in between Rs 6,500 to Rs 7,500 per 40 kg. The rate of Khal, Banola and oil remained a little bit low.
The Spot Rate Committee of the Karachi Cotton Association kept unchanged the rate of cotton at Rs 16,000 per maund.
Chairman Karachi Cotton Brokers Forum Naseem Usman has said that a bearish trend prevails in international cotton markets. The rate of Future Trading of New York Cotton remained at 82.40 American cents.
According to the USDA’s weekly export and sales report, 71,300 bales were sold for the year 2023-24. Guatemala was at the top by buying 21, 100 bales. China bought 20,700 bales and came second. Bangladesh bought 19,300 bales and stood at the third place.
As many as 7,500 bales were sold for the year 2024-25. Thailand was at the top by purchasing 5,300 bales. Turkey bought 2,200 bales and was on the second place.
Textile and clothing exports fell for the third month in a row due to growing production costs and liquidity crunch, according to statistics issued by the Pakistan Bureau of Statistics (PBS) on Wednesday.
The export value of textile and clothing exports shrank 9.95 per cent in the first quarter (July-September) FY24 to $4.12 billion from $4.58bn in the corresponding period last year.
In September, the textile and clothing exports contracted 10.88pc to $1.36bn from $1.52bn in the same month last year.
Pakistan Cotton Ginners Association (PCGA) has demanded from the government that in order to save the farmers and ginners from economic disaster, as per its announcement and promise, the government should buy one million bales of cotton through the TCP, so that prices can be stabilised in the cotton trade and cotton market and the farmers, and ginners also can get a better price. It said the price of cotton should be determined at the support price of Phutti which is Rs 8500 per maund.
Prime Minister of Pakistan should take immediate and emergency notice of the situation. Farmers are not getting reasonable rates of cotton, while the ginners are also passing through a worse crisis.
However, PCGA Chairman Chaudhry Waheed Arshad Vice Chairman Rana Waseem Hanif along with former chairmen Haji Muhammad Akram Sohail Mehmood Haral, convener FPCCI Malik Talat Sohail, CEC member Mazhar Shoaib Khan and senior ginner Chaudhry Imtiaz Ahmed while addressing the press conference said that the prices of cotton, Phutti, Khal and Banola have reached the lowest level of the season.
Meanwhile, Nadeem Shah, Vice President of Sindh Abadgar Board has said in a statement that the TCP should start buying Phutti on the intervention rate of Rs 8500 per 40 kg as per the government announced rates from the farmers.
He said that cotton farmers have currently sold 80 to 85 percent of the Phutti.
The government is only talking about buying cotton through the TCP. When these talks are implemented, the farmers will be left with a small amount of Phutti available. The government has not taken practical steps for providing relief to the farmers.
Due to the unmet promises of the government, the farmers suffered disappointment and losses, as a result of which they may not be interested in cotton cultivation next year. As a result, the country will have to spend billions of dollars to import cotton and local textile industry will also face difficulties.
Copyright Business Recorder, 2023
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