KARACHI: Cotton prices are on the rise, as spot rate has been increases by Rs 600 per maund. The reason behind increasing prices is that the number of operational ginning factories is increasing.
However, the issues faced by the textile sector remain unresolved. All Pakistan Textile Mills Association (Aptma) is continuously appealing to the government for the solution of these issues.
Federation of Pakistan Chambers of Commerce and Industry (FPCCI) is protesting against high tariffs of Independent Power Producers (IPP). They are appealing to the government that it should review the tariff structure of IPPS.
Moreover, Pakistan Cotton Ginners Association officials are make positive efforts in Islamabad to resolve issues of ginning factories, as Punjab explores options to boost cotton cultivation.
The local cotton market witnessed a significant increase in cotton prices during the past week. Business volume remained satisfactory, but the supply of cotton is limited because more ginning factories have started their operations. Fixed charges on oil mills and textile industry still remain there. Though, ginning factories and oil mills are operating, but they are not happy with the policies of the government. The government is also not giving any response to them. It seems as though they have given up.
Sources believe that the heads of these institutions should go to Islamabad and protest, and pressurise the authorities to get accepted their demands; otherwise, protesting from a distance will not be beneficial.
They said the government authorities are not concerned about the closure of Industry, increase in unemployment and collapse of economy. No one seems to be bothered about it and unless there are some strong protests, the issues will not be resolved. For this, a strong and united strategy needs to be developed.
However, the budget presented under the influence of the IMF is being termed as fatal for industries by economic experts. There has been a further increase in electricity and gas prices, which will add to the existing difficulties.
In Sindh province, the cotton price per maund was between Rs 18,400 to Rs 18,600, and the rate of Phutti per 40 kg was in between Rs 8,400 to Rs 8,800. In Punjab province, the cotton price per maund was between Rs 19,300 to Rs 19,500, and the rate of Phutti in between Rs 8,700 to Rs 9,700. In Balochistan province, the cotton price per maund was in between Rs 18,400 to Rs 18,500, and the rate of Phutti per 40 kg in between Rs 8,600 to Rs 8,800.
The Spot Rate Committee of the Karachi Cotton Association has increased the spot rate by Rs 600 per maund and closed it at Rs 18,600 per maund.
Karachi Cotton Brokers Forum Chairman Naseem Usman has said that there is stability in international cotton prices. The New York cotton futures price per pound is trading between 71 and 73 American cents. According to the USDA’s weekly export and sales report, around one lac and fifteen thousand bales were sold for the year 2023-24. China after purchasing 63,600 bales is on number one. Vietnam is on number second after purchasing 27,600 bales and Pakistan is on number third after purchasing 6,400 bales.
A total of 56,900 bales were sold for the year 2024-25. China is on the top after purchasing thirty six thousand and eight hundred bales, Pakistan is on number second after purchasing 8,800 bales, and Peru is on number third after purchasing 4,600 bales.
Meanwhile, Chairman Aptma has demanded that the federal government renegotiate the current agreements with Independent Power Producers (IPPs) and shift to other sources of generating electricity which is economically viable and without capacity charges. He emphasised that the exorbitant electricity prices have severely affected industrial operations, resulting in numerous closures and significant job losses, thus hindering economic growth. He said that Pakistan’s installed capacity has exceeded 40,000 megawatts, while the maximum demand and transmission capacity is only 25,000 megawatts. He stated that this disparity has resulted in underutilisation and overcapacity, despite which the government is bound to pay Rs 500 billion annually to 40 IPP companies, a burden that hinders economic activities. These payments are made even when electricity is not generated or supplied, which is a huge burden on the economy. He said that it is evident that capacity charges account for two-thirds of the total cost, while the remaining one-third is attributed to fuel costs. Research has revealed that IPPs are earning a profit of over 73% in dollars, which is unusually high compared to international standards. The problematic contracts resulting from the 1994 power policy have increased circular debt, which reached Rs 2.64 trillion by 2024.
Pakistan Cotton Ginners Association Chairman Chaudhry Wahid Arshad, accompanied by a delegation, met with Senate Chairman Syed Yousuf Raza Gilani in Islamabad and briefed him on the current taxes and issues facing the ginning industry.
Subsequently, they also met with the Chairman of the Standing Committee on Finance, Saleem Mandviwala, and informed him about the devastating effects of taxes on the ginning industry. The delegation also discussed budget-related matters. Later, the delegation met with Cotton Commissioner Dr Zahid Mahmood and apprised him of the cotton production and ginning industry’s situation. The delegation included former PCGA Chairman Haji Muhammad Akram and Sohail Mahmood Harl.
Furthermore, the Punjab government has initiated the process of exploring options to enhance cotton cultivation in the province. In this regard, Provincial Agriculture Minister Syed Ashiq Hussain Kirmani addressed a conference on cotton research and development at the Agriculture House on Friday, stating that Chief Minister Punjab Maryam Nawaz has a clear vision to introduce reforms in the research and development system. He added that various measures are being taken to modernise agricultural research according to contemporary requirements. He pointed out that the unavailability of quality seeds has led many farmers to abandon cotton cultivation, resulting in cotton production being limited to southern Punjab only. To restore cotton production, the public and private sectors must collaborate, as the revival of silver fibre production will boost the national economy.
The primary objective of this program is to utilize the experiences of public and private sectors to prepare high-quality cotton seeds. He emphasized that the discovery of high-yielding, climate-smart cotton varieties is the need of the hour.
Copyright Business Recorder, 2024
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