The. The arrival of Phutti increased. Bearish trend was seen in international cotton market. The business was affected due to the imposition of sales tax on cotton, textile products, and on Khal. In the local cotton market during the last week textile and spinning mills has shown interest in the buying of cotton while due to the increase in the supply of Phutti the trading volume increased and the prices remained stable.
In Sindh the rate of cotton is in between RS 8350 to RS 8400 per maund while the rate of Phutti is in between Rs 3600 to RS 4100 per 40 kg, while rates of Banola are in between Rs 1400 to Rs 1500 per maund. The supply of Phutti is increasing day by day in the province of Punjab and ginning factories has also started their operation as well as new ginning factories has also started working. The rate of cotton in Punjab is in between RS 8500 to RS 8600 while the rate of Phutti is in between RS 3600 to RS 4200 per 40 kg and the rate of Banola is in between Rs 1600 to Rs 1700 per maund. The arrival of Phutti from Balochistan has started partially while two ginning factories have started their operations partially. The rate of Phutti is in between Rs 4100 to Rs 4200 per 40 kg.
According to the information received from the lower areas of Sindh the position of cotton crop is satisfactory. The concerned departments had not released the total estimates of loss of cotton crop due to the attack of Tadi Dal. The cotton crop in few areas of Punjab was under attack of Tadi Dal but the concerned departments had controlled the situation. The situation of cotton crop is satisfactory in Punjab. The supply of Phutti is increasing day by day and the trading volume is expected to be increased after Eid Ul Azha.
Meanwhile, according to media reports White Fly and Sabz Tela has attacked the cotton crop in South Punjab. It is feared that they will damage the crop. The experts were of the view that White Fly can destroy 60 percent of the crop. Rains were forecast in coming days. Balanced rains will be beneficial for the crop while excessive rains are harmful.
Spot Rate Committee of Karachi Cotton Association has increased the rate of cotton by Rs 100 per maund and closed it at Rs 8300. Chairman Karachi Cotton Brokers Forum Naseem Usman told that due to the imposition of 10 percent sales tax on cotton and 17 percent sales tax on textile products by the government in budget business was affected badly. Pakistan Oil Mills Association had announced a strike in protest against the imposition of 5 percent sales tax on filer and 8 percent on non filers. Due to this decision there is uncertainty among the ginning factories owners. They were of the view that they can store cotton but they can't store Banola for a long time. The ginning factory owners were under fear and reluctant. The oil mills owners were of the view that Khal is a part of animals feed it is impropriate to impose tax on it.
Moreover, according to media reports Federal Board of Revenue has asked to send notices to 170 cotton industries of the country while FBR had asked to send notices to 450 cotton industries of Bahawalpur division. During the current season it is expected that one crore twenty lac bales of cotton will be produced in the country and the government is planning to collect Rs 8 billion revenue from it. Additional Commissioner income tax Bahawalpur Division hinted this due to which panic spread among ginners.
According to Naseem Usman bearish trend was witnessed in international cotton market. The bearish trend was seen in Rate of Promise (Waday ka Bhao) of New York cotton. According to the weekly report of USDA the export of cotton decreased by 62 percent while according to the monthly report of World Agriculture Supply and Demand Estimates (WASDE) the production of cotton in the world will be increased due to which the rate of cotton in New York Cotton Exchange is at lowest level as compared to previous three years. The trade conflict between US and China is affecting the rate of New York Cotton.
Mixed trend was seen in Chinese market. The bearish trend was seen in the prices of cotton in India, although the production of cotton in India is expected to be three crore ten lac bales which is 55 lac bales less than the initial estimate of three crore 65 lac bales. The Indian government has increased the support price of Phutti by Rs 150 per Kanter to increase the production of cotton.
In Pakistan the support prices of many crops were increased. The government had also announced to fix the support price of Phutti and also announced to buy 5 lac bales through TCP. The arrival of new crop has started, ginning factories has started their operation but up till now government has announced neither the support price of Phutti nor any announcement came from the government regarding buying of 5 lac bales through TCP. There is no business due to the imposition of 17 percent sales tax on textile products while the business is also effected by imposition of 10 percent sales tax on cotton.
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