The trading volume of cotton decreases. Prime Minister Imran Khan has issued instruction regarding increasing cotton production. Increase in energy prices strongly opposed.
In the local cotton market during the last week due to increase in the rate of good quality cotton by Rs 100 to Rs 200 per maund cautious buying was seen by the textile mills as a result of which trading volume decreases. The government has announced to abolish import duty on cotton from January 15. According to the sources of All Pakistan Textile Mills Association (APTMA) SRO has been issued in this regard. The government has eliminated subsidy from power due to which tariff of electricity for textile is increased by Rs 8 per unit along with other industries and now the electricity is available for textile sector is available at Rs 20 per unit instead of Rs 12 per unit. APTMA also protested against this increase. Export will suffer from the increase in the power prices and this is one of the reasons why the trading volume of cotton decreases.
In Sindh the rate of cotton is in between Rs 7000 per maund to Rs 9400 per maund while the rate of Phutti is in between Rs 3000 to Rs 4300 per 40 Kg. The rate of cotton in Punjab is in between Rs 7800 per maund to Rs. 9400 per maund while the rate of Phutti is in between Rs 3200 to Rs 4600 per 40 Kg. In Balochistan the stock of 3000 bales were left while Phutti was not available. Due to decrease in the production of cotton the increasing trend was witness in the prices of Banola, Khal and oil.
The Spot Rate Committee of Karachi Cotton Association has increased the rate of cotton by Rs 100 per maund and closed it at Rs 9100 per maund.
Chairman Karachi Cotton Brokers Forum Naseem Usman told that after the volatility in the international cotton markets there was a downward trend. The first phase of the economic dispute between China and US has been signed however currently; China has not signed any new cotton deals due to which there is uncertainty in the market. According to the weekly export report of USDA as compared to last week exports increased by 32 percent but the market took no notice.
On the other hand due to Lunar holidays in China from January 25 to February 2 delayed the purchase. In China the business remain suspended for seven days due to holidays. Due to severe outbreak of Corona virus in China, slow down was witnessed in the markets around the world.
Cotton prices in India are steadily declining however CCI was involved in massive buying in order to bring stabilization in the rate. The target of buying is 5 million but up till now only 38 million bales have been purchased.
The government has abolished subsidy from power due to which exports are having a negative impact. Other than APTMA Pakistan Business Council which is the representative body of 82 industries said that government had increased the electricity prices by 35 percent in the last 18 months due to which the exports are suffering very badly. PBC said that there is a kind of war going on between the government and businesses organization on increasing energy prices. APTMA also have similar kind of complaints.
A high level meeting was held on January 20, 2020 under the chair of Prime Minister Imran Khan in order to discuss cotton policy and matters relating to cotton crop which was attended by federal Minister for National Security Makhdoom Khusro Bakhtiar, Advisor on Commerce Abdul Razzaq Dawood, Special Assistant on Information and broadcasting Dr. Firdous Ashiq Awan and senior PTI leader Jahangir Khan Tareen. The meeting was also attended by cotton growers, exporters and members of the Cotton Committee from different parts of the country.
Prime Minister Imran Khan has directed that the recommendations regarding fixing of Cotton support price should be reviewed and recommendations should be presented at the earliest. He also directed that the amendment in the Seed Act and re-constitution of the Cotton Committee should be done immediately.
Naseem Usman while criticizing the government said that government's department's seriousness in increasing the cotton production is evident from the fact that government has not allocated a single penny for increasing the production of cotton. Prime Minister Imran Khan should particularly focus on this matter. Few days back during a high powered meeting Imran Khan has directed to constitute a high powered committee regarding increase in cotton production during the next season.
He also pointed out the issues due to which the cotton production is decreasing. In the past committees were constituted but the governments failed to give desirable results. To make the new committee effective, private sector experts including agricultural scientist and cotton related organizations should be included.
APTMA, PCGA, KCA, PCC, PCSI and Karachi Cotton Brokers Forum presented their suggestion to the government on this great problem. During the last week report of January 18 many valuable suggestions were given. If more suggestions are needed regarding solution of this problem government can contact Karachi Cotton Brokers Forum.
Our economy is already passing through hard times. In the current season foreign exchange of USD 2 billion spend on the import of cotton. This will be an unbeatable burden on economy.
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