WEEKLY COTTON REVIEW: No business in local market due to coronavirus

The cotton trade was badly affected by coronavirus internationally. Local textile mills and ginners were in distress. Textile mills were shut down after the building up of inventory as a result of suspension of export orders from abroad.
There was no business in the local cotton market due to coronavirus. However Karachi Cotton Association doesn't suspend its operations because it is an international market and it opened on daily basis and spot rate was issued regularly.
During the last week the Spot Rate Committee had stabled the rate at Random Rs 8800 per maund. In Sindh and Punjab the rate of cotton is in between Rs 6800 and Rs 8800 per maund. There was hardly any Phutti available with farmers and traders however Phutti was available with ginners in small quantity. Only some ginning factories were in a position of continuing their operations but those were also closed due to coronavirus.
On the other hand big international importers especially the big American and European importers of textile had hinted of canceling the orders and stopping of shipments due to which textile mills were in distress.
More then 100 mills were closed up till now due to the building up of inventory while some mills were working partially but they were near closing. Due to the closure of mills unemployment was increasing.
Textile mills were facing double losses on one hand extraordinary delay in shipments and canceling of orders. On the other hand due to the extraordinary increase in the rate of dollar the price of imported cotton was also very high however importers can revise and renegotiate canceled contracts due to the increase in the prices of dollar.
On the other hand Pakistan Cotton Ginners Association in a especially written a letter to Prime Minister Imran Khan requested him that government should ask banks to waiver off the interest of the ginners from March 1st to July 31 so that they can buy Phutti from the farmers. They wrote a letter to Prime Minister in such a situation when ginners had the stock of 5 lac bales and they had no buyer of this stock. Moreover, the weight of cotton was also decreasing due to which they were bearing double loss.
Chairman Karachi Cotton Brokers Forum Naseem Usman told that coronavirus spread in the whole world due to which the business in the world is stagnant. Fluctuation was seen in the Rate of Promise (Waday ka Bhao) of New York Cotton during the last week. The rate of cotton reached at the lowest level of 49 American cents but after an increase of 4 cents it was 53 American cents but on the last day the rate was closed at 51.33 American cents after decreasing again. According to the weekly export of USDA the exports were decreased by 19 percent.
In China businesses are coming back to normal but still there is uncertainty prevails in cotton market.
In India, too, the coronavirus is hampering business operations however the rate of cotton is issued on daily basis. The rate of cotton is stable in India no fluctuation is seen in the rate.
Naseem Usman told that government had announced incentives due to coronavirus especially interest rate was slashed by 1.50bps to 11 percent. On the other hand Dollar is at Rs 167 which is at highest level in the history of Pakistan but due to slump in businesses in international markets its immediate positive effects are disappearing.
After the lockdown due to coronavirus the European Union and America had started canceling the orders of textile products from abroad. In this situation the organizations in India and Bangladesh associated with manufacturing of textile products had started appealing to importers that they should not cancel the orders.
President of Bangladesh Garments Manufacturers and Exporters Association Dr Rubana Haq and Indian textile minister Smriti Irani appealed to the importers that they should not cancel the orders because if they can cancel the orders then millions of people will be jobless. They said instead of canceling the orders they can delayed their payments. It is very sad that our textile minister had not appealed to the importers that they should not cancel the orders but they can delayed their payments.