The prices of cotton remained stable. The trading volume is increasing gradually. The government is trying to increase the production of cotton. The private sector should also play its role for increasing the production of cotton. The government has issued the SRO regarding the import of cotton. The importers have signed agreements to import three million bales of cotton.
During the last week trading volume remained comparatively low but remained firm in the local market because of the conscious buying from textile and spinning mills as the ginners demand high rates of good quality cotton.
The price of cotton in the Punjab and Sindh remained Rs7700 per maund to Rs 8800 per maund while Seed cotton (Kapas/Phutti) ranges from Rs 3000 to Rs 3600 per 40 Kgs in both Sindh and Punjab. The cotton in Balochistan is available at the rate of Rs 8000 to 8200 per maund while the rate of seed cotton was from Rs 3300 to 3600. The seed cotton in Balochistan was not available in much quantity.
The Karachi Cotton Association (KAC) spot rate committee stablilised the rate of cotton at Rs 8700 per maund. The Karachi Cotton Brokers Forum has said that big textile groups have signed agreements on the import of three million bales of cotton from abroad that is why the buyers are not taking much interest local cotton purchases.
The Federal Board of Revenue (FBR) on Friday notified zero percent sales tax on the import of cotton from February 1, 2019 till June 30, 2019. A mixed trend was seen in international market. The local textile and spinning mills have enough storage of cotton because of limited buying in local market while the international buying remained low. It is expected that buying will pick up in coming days as the buyers have started taking interest in the market.
The trading is slow because of the US-China trade war, but it is expected that situation will improve in coming days. On the other hand, due to Chinese Lunar festival holidays from February 4, to February 10 there will be a slowdown in trade activities all over the world.
Earlier, Prime Minister Imran Khan has asked the concerned departments to take measures to achieve the production target of 15 million bales of cotton. It is expected that water problem will be solved to some extent in the coming season due to snowfall on hills.
Federal Finance minister Asad Umar has said that cotton is the backbone of our economy. He has also said that any reduction in cotton crop is not good for economic growth of the country. He said there is a need to give due attention to cotton production. This shows that the government is serious in increasing the production of cotton.
Federal Finance Minister Asad Umar and Prime minister's advisor on commerce, textiles, industries and investment Abdul Razzak Dawood are offering incentives to export industry in order to increase exports.
On the other hand, State Bank of Pakistan (SBP) is continuously increasing the interest rates. Recently, the SBP hiked the interest rate by 25 basis points to 10.25 per cent. The recent increase in interest rate will increase the cost of production and adversely affect exports.
Earlier, a milestone was achieved in the cotton production of the country. Balochistan has produced Pakistan's first organic cotton bale. According to the World Wildlife Fund (WWF), the harvesting of the cotton bale was made possible due to the cooperation of Balochistan's Department of Agriculture.
During the current season, the Federal Agricultural Committee has estimated that 14.3 million bales of cotton will be produced but the Cotton Crop Assessment Committee has revised the target from 14.3 million bales to 10.8 million bales.
It is welcoming that big textile groups are taking interest in increasing the production of cotton. In this regard textile tycoon and chairman Nishat Textile Mian Muhammad Mansha while talking to Business Recorder said that seed development needs to take place. "We have already formed a company called SANIFA, which is a joint venture between Sapphire, Nishat and Fatima Group. We hope that when new seed is available, cotton production will automatically increase," according to him.
Cotton experts have suggested that cotton production would witness a bigger boost if some other big textile groups also set up SANIFA-like companies.
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