The trading volume increased in the cotton market despite the India and Pakistan tension on the borders but the price of cotton shows down word trend. Due to the rumors of imposition of custom duty on the import of Indian cotton exporters are hesitant to ship their product. There are also rumors of imposition of Fix Indicative Price of cotton. The meeting held to start Hedge Trading in cotton remained unsuccessful.
During the last week overall trading in local cotton market the prices of cotton shows down word trend, the prices of cotton decreased by Rs 100 to Rs 150 per maund. The trading volume increased due to the tension on India Pakistan border. The Indian government has imposed 200% duty on the import of Pakistani products. There are rumors that Pakistan may impose duty on the import of Indian products. There are rumors circulating regarding the imposition of duty on many products but at this point of time cotton is not included in the list.
About 250 to 300 containers of cement and dry fruits were stuck up on border. Keeping in view the situation the exporters of Indian cotton were in dilemma and they were avoiding export orders. It is expected that due to this situation the local importers will start showing interest in buying from local ginners. Due to this reason on Friday textile and spinning mills were involved in buying of 15000 bales. Before this there were trading of 2,000 to 3,000 bales.
If the government, impose import duty on Indian cotton then for time being the local mills will buy cotton from local ginning mills and will import cotton from USA and abroad on reasonable prices.
The price of cotton during the week in the Punjab and Sindh remained Rs7000 per maund to Rs 8800 per maund while the price of Seed cotton (Kapas /Phutti) which is available in small quantity is from Rs 2800 to Rs 3500 per 40 Kgs in both Sindh and Punjab. The cotton in Balochistan is available at the rate of Rs 8000 to 8100 per maund while the rate of seed cotton is from Rs 3000 to 3500 per 40 kg. The Karachi Cotton Association (KAC) spot rate committee decreased the spot rate price by Rs 100 per maund and closed the rate at Rs 8500 per maund.
Chairman Karachi Cotton Brokers Forum Naseem Usman said that prices of cotton remained stable in international market. There was slow down in the market due to the tension on India and Pakistan borders. The exporters were indecisive and the shipments were stopped.
The rate of New York Cotton on Thursday witnessed bullish trend on Dollar Index. The news of US President Donald Trump statement regarding improvement in China and US ties the New York market recorded 200 cent increase.
It is pertinent to mention here that 90 days dead line going to end on February 28. The meeting between US and China is expected to be held on March 1. It is expected that outcome of the talk will be positive.
According to the estimates of weekly report of February 10 to 14 released by United States Department of Agriculture the rate of New York cotton on Friday decreased by one cent. On the other hand fluctuation was witnessed in the rate of cotton in China.
Despite the increase in exports of textile products the slowdown is witnessed in the local business of cotton yarn and the textile products the spinning and textile mills are busy in cautious buying due to which the rate of cotton is not increasing. According to the estimates at present ginners has the stock of 1.2 million bales while the new season of cotton will start in four months.
Earlier, last Wednesday a meeting was held in Islamabad to start Hedge Trading in cotton, the meeting was attended by representatives of APTMA, KCA, PCGA and PMX but no decision was taken in the meeting. It was hinted that meeting will be held again.
In the meeting the representatives of APTMA and PCGA showed reservation on starting Hedge Trading while the representatives PMX and KCA supported the Hedge Trading.
The government wants that growers get reasonable price of cotton seed so that growers will be encouraged and play their role for increasing the cotton production.
On the other hand, the secretary of National Assembly Standing Committee on National Food Security and Research Dr Muhammad Hashim Popalzai said that government wants to introduce Fix Indicative Price system for cotton to encourage farmers in order to increase the production of cotton and cultivation land. He said that reason of decrease in cotton production is construction of sugar mills in cotton cultivation areas.
Cotton commissioner Dr Khalid Abdullah said that reason of low cotton production is cultivation of sugar cane in the area of cotton. He suggested that government should also fix the support price of cotton like of wheat and sugar cane. He also suggested that regulatory duty should be imposed on the cotton like wheat and sugar cane so that cotton growers can get reasonable price of cotton seed. The chairman of the committee MNA Rao Muhammad Ajmal has recommended that concerned ministry should take practical steps for the increase in the production of cotton.
Comments
Comments are closed.