WEEKLY COTTON REVIEW: No business in market as price remains stable

The prices of cotton remained stable. There was almost no business in the market. The organizations related to agriculture and economy asked the government to take practical steps to increase the production of cotton. Due to the extraordinary increase in the energy prices as well as extraordinary delay in the release of amount of sales tax there was uncertainty in the textile sector. There is an alarming threat of closure of business.

In the local cotton market during the last week due to the cautious buying of textile mills and due to the demand of high rate of good quality cotton by the ginners the trading volume remained low. Overall the rate of cotton remained stable.

On the other hand due to the starting of the delivery of imported cotton from abroad. Textile mills were busy in clearing payments of the imported cotton. The business activities in the world have come to halt due to Corona Virus in China. Moreover, the government has increased the rate of energy manifolds due to which textile sector was heavily affected along with other industries.

In Sindhi the rate of cotton is in between Rs 7000 to Rs 9200 per maund. While the rate of Phutti which is available in very limited quantity is in between Rs 2800 to Rs 4100 per 40 Kg. In Punjab the rate of cotton is in between Rs 7600 to Rs 9300 per maund while the rate of Phutti is in between Rs 2800 to Rs 4500 per 40Kg.

The Spot Rate Committee of Karachi Cotton Association has increased the spot rate by Rs 100 per maund and closed it at Rs 9100 per maund.

Chairman Karachi Cotton Brokers Forum Naseem Usman told that over all in the international market the prices of cotton remained bearish. Fluctuation was seen in the prices of New York Cotton. According to the weekly export report of USDA the increase of 28 percent was witnessed. However, positive response was not seen in the market.

China was shaken by Corona Virus and the markets were also under the influence of Corona Virus. The effects of the Corona virus have decreased on the markets as a result which bullish trend was witnessed in the markets and the recovery has been started in cotton markets also. The cotton market was slow in China due to lunar holidays while the bearish trend was witnessed in Indian cotton market.

The local textile sector is in crisis due to the phenomenal increase in the energy prices. Textile organization appealed to the government in a press conference that it is difficult to run mills due to sky rocketing prices of energy delay in the release amount of sales tax refund. The mills are facing difficulties in full filling the commitments with the foreign buyers. They said that government was not serious in fulfilling the promises and had taken U Turn due to which the business were effected very badly. The textile sector hinted that it in this situation it was difficult for them to carry on with the business.

Moreover, an emergency meeting of Karachi Cotton Brokers Forum was held on Friday in which they gave useful suggestions to the government regarding increasing the production of cotton. The government should consider these suggestions and took decision regarding increase in the production of cotton in the next season.

In lower Sindh the sowing season of cotton will be initiated in the last days of February and partially started from middle of March. There were reports that wheat harvesting has been started in some lower areas of Sindh. The cotton crop has immense importance in the economy of the country due to which different institutions of the country had took notice of the drastic decrease in the production of cotton in the country. They were forcing to take steps for the increase of production of thee most important crop for the economy of the country.

Pakistan's former finance minister and noted economist Dr Hafeez Pasha in its statement said that production of cotton in the country is lowest in the last 16 years. The country has to import 50 lac bales from abroad after spending the foreign exchange of two billion dollars.

Women Association has asked the government to take steps for increasing the production of cotton.

President Federation of Pakistan Chambers of Commerce and Industry Mian Anjum Nisar has issued a comprehensive statement regarding increase in the production of cotton. Anjum Nisar had given suggestion for increasing the production of cotton after showing his concerns on decreasing production. He called on taking necessary steps on emergency basis for increasing the production of cotton. He said that production of cotton decreased from 15 million bales to 9.45 million bales. The basic reason behind the reduction of cotton is less per acer yield, sowing of other crops on the areas suitable for the sowing of cotton, use of unverified seeds and use of low standard insecticides. There is a gap of 50 lac bales between production and demand that's why local industry has no choice except to import cotton from abroad in order to increase the exports.

Cotton factories were closing on large scale due to increase in demand of cotton yarn, decrease in its rate and very limited business activities. Some factories had limited their ginning activities. Mills are importing cotton on huge scale due to low cotton production as well as due to the non availability of good quality cotton.

According to the careful estimates up till now mills has signed agreements for the import of 45 lac bales and their deliveries are started.