KARACHI: Though overall cotton prices remained stable, but due to decrease in purchases, they have also started to decrease, albeit slightly.
Business volume is very limited. The crisis in the textile sector is getting severe. Financial crisis is increasing also. A sharp rise in gas prices has forced many industries to shut down their operations.
According to the sources., instead of reviewing the existing export industries, the Federal Minister of Commerce is active in forming advisory councils to support exports.
Chairman Kissan Itehad Khalid Khokhar has said that government had disappointed farmers by not implementing its decision of buying Phutti from the cotton farmers at the announced price of Rs 8,500 per 40-kg. This will effect the production of cotton next year.
However, Head Transfer of Technology Cotton Research Institute Multan Sajid Mahmood said that non-payment of cotton cess by the textile industry can lead to a detrimental impact on cotton research and development.
In the domestic cotton market, overall cotton prices remained stable during the past week. Textile spinners are interested in quality cotton but ginners are demanding higher prices due to low business volume.
On the other hand, cotton growers are selling limited quantities of quality cotton, due to which the ginners are looking a little worried. However, the difficulties of the textile sector are increasing due to the recession in the demand for cotton yarn and textile products in the local and international markets.
On the other hand, production costs are increasing due to the sharp rise in energy tariffs, especially gas prices. Manufacturers, including the textile sector, are constantly appealing to the government to reduce the gas prices, but instead of reducing prices, according to reports, IMF has asked for further increase in the price of gas.
Karachi Chamber of Commerce and Industry and commercial and industrial organisations of Sindh province have jointly told the government that if the price of gas is not reduced, it will be difficult for them to run the industries.
Due to the increase in energy and gas prices in the country, the industrialists are indicating that they will close their units. However, caretaker Federal Minister for Commerce and Industry Gohar Ejaz has constituted an Export Advisory Council comprising 10 tycoons of textile sector and six members of government institutions.
A second Export Advisory Council (other than textiles) has been formed, comprising of fifteen industrialists and six members from government bodies. These councils will be supervised and headed by Dr Gohar Ijaz. These councils are constituted under the auspices of Special Investment Facilitation Council which will meet time to time.
In a statement, Dr Gohar Ejaz has showed his satisfaction on forming the councils and said that these councils will give valuable advice regarding increase in exports. This will increase the exports of textile and other industries by 100 billion dollars and the economy will grow.
Separately, the price of cotton in Sindh province is in between Rs15,500 to Rs 18,000 per maund according to the quality, and the price of Phutti is in between Rs 5,500 to Rs 7,200 per 40 kg.
In the province of Punjab, the price of cotton is in between Rs16,500 to Rs18,000 per maund and the price of Phutti is in between Rs 6,500 to Rs 7,800 per 40 kg.
In Balochistan, the price of cotton is in between Rs 17,000 to Rs 17,500 per maund and the price of Phutti is in between Rs 7,000 to Rs 8,500 per 40 kg.
The rates of Binola, Khal and oil remained low. The Spot Rate Committee of the Karachi Cotton Association stabled the rate at Rs 17,500 per maund.
Chairman Karachi Cotton Brokers Forum Naseem Usman told that the rate of cotton remained stable in the international cotton market.
According to the USDA’s weekly export and sales report, sales for the year 2023-24 were three lac and twenty two thousand and two hundred bales.
China was at the top by buying two lac and thirty seven thousand and three hundred bales. Mexico was on second position by buying 29,400 bales. Vietnam bought 24,500 bales and ranked third.
As many as 5,700 bales were sold for the year 2024-25. South Korea topped the list by buying 3,500 bales. Japan bought 1,200 bales and came second. Mexico was in third place by buying 1,000 bales.
Meanwhile, Chairman of Kisan Ittehad Khalid Khokhar has said in a statement that the government had promised that they will ensure that farmers will get the payment on the government announced intervention price of Rs 8,500 per 40 kg. Unfortunately, government had failed to fulfil their promise due to which the farmers were disappointed. This will effect the future cotton production.
However, Head Transfer of Technology Cotton Research Institute Multan Sajid Mahmood said non-payment of cotton cess by the textile industry can lead to a detrimental impact on cotton research and development. This shortfall in funding may result in reduced resources for crucial research initiatives, hindering the development of new and improved cotton varieties, technologies, and cultivation practices.
He also said as a consequence, the overall productivity and quality of cotton in the industry could suffer, affecting the entire cotton value chain. This may lead to challenges such as decreased yields, lower quality cotton, and increased vulnerability to pests and diseases, ultimately affecting the livelihoods of those dependent on the cotton sector.
The Pakistan Hosiery Manufacturers & Exporters Association (PHMA) has raised concerns over the exclusion of the knitwear sector from the newly formed Export Advisory Council for Textiles and has urged the Ministry of Commerce to rectify the omission.
In a letter addressed to Federal Minister for Commerce Gohar Ejaz, PHMA Central Chairman Nahid Abbas underscored the importance of representing the knitwear industry, the largest export-earning sector, on the advisory council. He highlighted the significant role played by the PHMA in fostering growth across various sectors of the economy, generating substantial employment, and contributing to national self-reliance.
While acknowledging the efforts to establish the Export Advisory Council, Abbas stressed the need for its composition to be based on merit, ensuring the inclusion of all genuine stakeholders. He expressed confidence that the council, with proper representation, could offer valuable recommendations and measures to enhance textile exports, ultimately providing a substantial boost to the country’s economy.
PHMA North Zone Chairman Farrukh Iqbal highlighted that despite facing challenges, the knitwear sector has consistently outperformed other export sectors. He urged the government to extend support to this vital sector, which has the potential to lead the country out of crises, contribute significantly to foreign exchange earnings, and create mass employment.
PHMA North Zone Senior Vice Chairman Amanullah Khan voiced strong protests against the neglect of the knitwear sector in the council. He demanded representation for the sector, allowing it to articulate the challenges it faces and contribute to the formulation of progressive policies.
While acknowledging the nomination of respectable personalities to the council, Khan asserted that neglecting the crucial Small and Medium-sized Enterprises (SMEs) within the industry was unacceptable. He called for the inclusion of the knitwear sector to ensure a comprehensive representation of all stakeholders.
PHMA leaders highlighted the sector’s role as a major taxpayer, the largest employment generator in the textile chain, and a significant contributor to foreign exchange earnings through export goods. They urged the government to discourage the export of raw materials and instead incentivise the export of value-added products.
Copyright Business Recorder, 2023
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