KARACHI: The cotton price during previous week remained stable, with an improvement in business volume. International cotton prices were increased, and many cotton import contracts were in place.
The cotton production was 82 lakh 58 thousand bales, and the total production is expected to reach 84 lakh bales. However, there are challenges as thousands of bales of imported Afghani cotton are stuck due to the border dispute.
Additionally, there has been a decrease in the export of the textile sector. To address this, production should be increased by importing new technology and seeds from other cotton-producing countries. All Pakistan Textile Mills Association should play an active role in boosting cotton production.
In the domestic cotton market, prices remained generally stable last week. Textile mills h sustained their interest in buying high-quality cotton, and business volume was relatively good. Despite the ongoing financial crisis in the markets, inquiries for cotton yarn persisted, and the demand for picking cotton yarn can be considered favourable. There is optimism that business conditions will improve in the coming days. Presently, a decrease in cotton prices is anticipated, and the stock of cotton is decreasing day by day.
The Pakistan Cotton Growers Association has released data on cotton production in the country until January 15. During this period, the cotton production reached 82 lakh 58 thousand bales, marking a significant increase of 33% compared to last year’s total production of 49 lakh bales. This year’s production of 82 lakh 58 thousand bales is also 67% higher than the 50,000 bales produced in the same period last year. The previous season experienced a notable decline in cotton production due to heavy rains and a destructive storm. However, this year’s production has shown improvement. According to sources, if unregistered cotton is taken into account, the total production is estimated to be around 95 lakh bales.
According to information from the World Exhibition of Textile Products held in Frankfurt, Germany, from January 9 to 12, Pakistani companies have secured orders in a large number promising a boost in textile exports. A total of 272 Pakistani companies participated in the exhibition, with more than 46,000 attendees from 130 countries.
The rate of cotton in Sindh and Punjab is in between Rs 16,500 to Rs 20,000 per maund. The rate of Phutti in Punjab is in between Rs 7,000 to Rs 9,300 per 40 kg. The Phutti is not available in Sindh. The rate of cotton in Balochistan is in between Rs 17,000 to Rs 17,500 per maund. The rate of Khal, Banola and oil remained stable.
The Spot Rate Committee of the Karachi Cotton Association kept the rate of cotton unchanged at Rs 19,000 per maund.
Naseem Usman, Chairman of the Karachi Cotton Brokers Forum, stated that the price of Future Trading of cotton has risen in the international cotton market, with New York cotton currently priced at 84 American cents per pound.
According to the USDA’s weekly export and sales report, 420,000 bales were sold for the 2023-24 year. China led the purchases with 227,700 bales, while Vietnam followed with 38,900 bales. Pakistan secured the third position by acquiring 37,300 bales. Guatemala purchased 17,600 bales for the 2024-25 year.
Seed cotton (Phutti) equivalent to over 8.2 million or exactly 82, 58,115 bales has reached ginning factories across the country till January 15 2024.
According to a fortnightly report of the Pakistan Cotton Ginners Association (PCGA) released on Thursday, over 8.2 million or 82,02,690 bales have undergone the ginning process, i.e., converted into bales. Cotton arrivals in Punjab were recorded at over 4.1 million or 41,58,606 bales. Sindh generated over four million or 40,99,509 bales.
Textile sector bought 74,78,002 bales while exporters purchased 2,92,126 bales and the Trading Corporation of Pakistan (TCP) didn’t buy during the cotton season 2023-24.
Sanghar district of Sindh topped with a cotton arrival figure of 16,90,360 bales followed by Bahawalnagar district of Punjab with 11,08,797 bales. A total of 165 ginning factories were operational in the country. Exactly 4,87,987 cotton bales of unsold stock were available in ginning factories.
Naseem Usman commented on the report, stating that based on the statistics, the total cotton production in the country is anticipated to be approximately 84 lakh bales. If unregistered bales are considered, the total production could reach around 95 lakh bales.
The consumption of the country’s textile mills is conservatively estimated to be around one crore and twenty lac bales. Currently, there is an outstanding delivery of imported cotton from last year’s imports, totalling about 16 lakh bales with a weight of 155. Afghanistan is anticipated to import around 8 lakh bales of cotton; however, the closed borders due to the dispute between Pakistan and Afghanistan have resulted in thousands of trucks and containers loaded with cotton and other commodities. The proposal is to implement the new law once the two countries resolve their issues and allow passage for the existing stranded trucks.
Experts believe that due to goods worth billions of rupees being left on trucks for extended periods, both the trucks and the goods are suffering irreparable damage. With the rise in cotton prices, textile mills have begun importing relatively cheaper cotton. Cotton import agents report the signing of contracts for approximately 4 lakh bales in the last month, with ongoing contract negotiations.
The Pakistan Bureau of Statistics (PBS) reported that during the first half of the current financial year (July to December), the exports of the country’s textile group decreased by about 4.97 percent, reaching 8.283 billion dollars compared to 8.716 billion dollars during the same period in 2022-23.
The country’s total exports for the July-December 2023 financial year (2023-24) stood at $14.991 billion (provisional), indicating a 5.24% increase compared to $14.244 billion in the same period last year.
Total exports in December 2023 were $2.822 billion (provisional), compared to $2.573 billion in November 2023, reflecting an increase of 9.68% and 22.64% when compared to $2.301 billion in December 2022.
On a month-on-month (MoM) basis, textile exports increased by 6.15% in December 2023, reaching $1.318 billion, compared to $1.399 billion in November 2023, as per the export and import data released by PBS. On a year-on-year (YoY) basis, textile exports grew by 3.33% in December 2023, amounting to $1.354 billion, compared to December 2022.
Cotton yarn exports rose by 54.25% in the first half of the current financial year, reaching $588.529 million compared to $381.545 million in the corresponding period of the previous financial year.
On a year-on-year basis, cotton yarn exports increased by 78.55% to $95.252 million in December 2022 compared to $53.349 million. Additionally, on a month-on-month basis, there was an 11.13% increase compared to $85.713 million in November 2023.
Sajid Mehmood, the Head of the Transfer of Technology Department at CCRI Multan, stated that the Pakistan Central Cotton Committee, the largest cotton research institute in Pakistan, has been facing financial and administrative crises for the past eight years, and regrettably, it is being intentionally neglected.
Is it not necessary to identify the elements that have brought this important national institution to its current state, he said. PCCC has directly or indirectly supported all other public and private institutions in Pakistan in the field of cotton research, contributing to a bright chapter in the history of cotton development and sustainability in the country. However, the future of cotton appears bleak without addressing the injustice being done to it today.
He said Brazil doubled its cotton crop in five years, while we halved ours. To understand how we arrived at this point, the formation of a national commission is indispensable. Without identifying the responsible elements and supporting research institutes in line with their true spirit, the right direction cannot be determined.
Copyright Business Recorder, 2024
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