Weekly Cotton Review: prices remain stable due to buying by textile, spinning mills

The prices of cotton remained stable. The government has set the target of production of 15 million bales according to the vision of Prime Minister Imran Khan. However the premium of Rs 200 per 40 Kg on Cotton Seed will be paid.
In the local cotton market during the last week the prices of cotton remained stable due to the buying of cotton by textile and spinning mills. The ginners had the stock of 600,000 bales while many mills need cotton due to which the trading volume remains little bit reasonable.
The prices of cotton in both Sindh and Punjab remained Rs 7300 to Rs 9000 per maund. The Karachi Cotton Association (KCA) Spot Rate Committee stabled the spot rate price at Rs 8800 per maund while Seed cotton (Kapas/Phutti) is not available.
Chairman Karachi Cotton Brokers Forum told that during the current season estimated crop of cotton will be 10.08 million bales as compared to the last year production of 11.6 million bales which was 7 % less. The relevant departments were active to achieve the target of production of 15 million bales set by Prime Minister Imran Khan for the year 2019-20.
In the international cotton market mixed trend was seen in the prices of cotton. The fluctuation of 2 American cents was seen in the Rate of Promise (Waday Ka Bhao) of New York Cotton market due to which the rate of cotton is in between 76 and 78 American cent. According to the Cotton Association of India the production of cotton in India will be 3 crore 21 lac bales which is 44 lack bales less than the initial estimate of 3 crore 65 lac bales. More over China announced the quota of importing 800,000 ton bales of cotton which is equal to 47 lac bales of 170 kg due to which it is expected that prices of cotton in international market will increase.
Mean while cotton sector is in confusion regarding the announcement of payment of Rs 200 per 40 kg premium on the production of contamination free cotton in a meeting held in Multan last week regarding increase in the production of cotton.
Chairman Karachi Cotton Brokers Forum said that Chairman Pakistan Cotton Ginners Association Mian Muhammad Mahmood Ahmed said that it was decided in the meeting that 20 cotton factories in Punjab and Sindh will be selected which will give Rs 200 per 40 Kg premium on Contamination Free Cotton. The farmers of these will be directed that they will give clean Contamination Free Cotton to these selected factories. The ginners will make cotton bales from this cotton and the textile and spinning mills as well as private exporters of cotton will pay the premium accordingly. Mahmood said that government had given them assurance that they will give directions to the big textile and spinning groups that they will only buy cotton from these ginning mills after paying reasonable premium.
According to the information Federal Committee on Agriculture (FCA) set a cotton production target of 15 million bales for the year 2019-20. The cotton will be sowed on an area of 2.895 million hectares. It is hoped that sufficient amount of water will be available for the crop, while the tender for the import of fertilizer has also been issued.
According to the experts FCA has set a cotton production target of 15 million according to the vision of Prime Minister Imran Khan. For this purpose an area of 2.895 million hectares has been allocated. Last year FAC has set the initial target of production of one crore 43 lac 70 thousand bales for which 2.955 hectares (73 lac acres) was allocated but due to intense shortage of water sowing process was completed on 2.406 hectares (60 lac acres) due to which only one crore 8 lac cotton bales were produced. In the year 2017-18 one crore 16 lac bales of cotton were produced for which government had allocated 2.700 hectares (67 lac acres) for cotton sowing.
For the year 2019- 20 FCA has set the target of production of 15 million bales which is difficult to achieve from the allocated land because it is not sufficient to achieve the target. According to the experts 15 million bales of cotton were produced in 2011-12 for which cotton was sowed on 3.600 hectare (88 to 90 lac acres). If the cultivated land of cotton is not increased then it is difficult to achieve the set target.
The experts were of the view that it is premature for FAC to set the target before knowing the estimated land of sowing of cotton because for the last many years the officials of FAC gave the estimates of production by sitting in rooms due to which difference of lacs of bales were seen. The process of estimation of cotton crop should be done in the month of June so that estimation should be real.
Moreover, chairman All Pakistan Textile Mills Association (APTMA) Syed Ali Ahsan and Prime Minister's advisor on Commerce and Textile Razzaq Dawood and Chairman Task Force on Textile Salman Shah will try to achieve 50 billion dollar export of textile products in next five years which will give rise to investment and 15 million jobs will be created. In the local market the upward trend was witnessed in the prices of cotton, cotton yarn and textile products.