WEEKLY COTTON REVIEW: Business activities remain suspended

Increasing trend was witnessed in the international cotton markets. Like textile mills of Punjab textile mills of Sindh hinted to start operations partially. State Bank of Pakistan has announced a refinance scheme for the payments of salaries to the workers. Will the appointment of Syed Fakhar Imam give boost to the efforts of the government of increasing the cotton production?

In the local cotton market during last week business activities remains suspended due to lockdown because of coronavirus. Since last three weeks cotton business have been suspended in the cotton exchange however the office of Cotton Association opened daily but the ginners and textile mills were not taking interest in trading. The business was suspended not only in cotton exchange but in the whole country. Spot rates are necessary for banks and at international level due to which Karachi Cotton Association has stabled the rate at Rs 8800 per maund.

The rate of cotton in Sindh and Punjab is in between Rs 7000 to Rs 8800 per maund but there was no report of trading from any where.

On the other hand wheat is being harvested and partial sowing of cotton has started. Cotton production has not yet been estimated by the government this year. Moreover, government has hinted to announce support price of cotton but it is not announced yet. The farmers are saying that if the government will announce the support price of cotton then they will take more interest in the sowing of cotton other wise they will focus on growing other crops. The experts are of the view that government should announce support price of cotton as early as possible other wise delay in announcement will effect the production of cotton.

The government has taken the charge of Ministry of National Food Security and Research from Makhdoom Khusroo Bakhtiar after his alleged involvement in sugar scandal and appointed agriculture expert Syed Fakhar Imam as MNFSR minister. The act of government is appreciated although he is aged now but he holds a vast experience.

According to some people it is expected that in proceeding years production of cotton will be comparatively low due to government's action against sugar mafia. It is expected that area of sugar cane cultivation will be decreased because a vast area has been under control of sugar mafia. From the area which is under control of sugar mafia some land will be available for cotton cultivation but is only when cotton farmers will get good price of Phutti and it is possible when support price of cotton will be announced by government on time.

Moreover, there is uncertainty in the world and the businesses are stalled. The unemployment is increasing day by day which causes irreparable loss to the life and properties. It is not known that in how much time coronavirus will be controlled. It is expected that its deadly effects will remain for months.

The economy is badly engulfed due to the negative effects of coronavirus. The unemployment is increasing day by day due to stagnation of businesses. Like other businesses the business of textile products is also affected. The foreign importers especially the European and American importers are canceling their orders due to which industry is facing irreparable loss. Due to the lockdown textile industry is bearing loss internally especially before the start of the holy month of Ramazan there is a peak season for textile products. In this export oriented mills has requested the government to allow them to start their operations partially in order to save them from further loss. It is worth mentioning that textile products of worth billions of rupees are ready for export and products of worth billions of rupees are under production.

In this regard commissioner Karachi gave them the permission after that some mills have started their operations partially but they were asked to close their operations not only that their owners were taken into custody.

This act was condemned by business community, local chambers as well as FPCCI. There is still an order that mills will remain close.

Moreover chairman Karachi Cotton Brokers Forum Naseem Usman told that there was no business in the world cotton market due to coronavirus.

During the last few days in the world stock exchanges decreasing trend was witnessed in shares but some increase was witnessed in their businesses. The Rate of New York Cotton witnessed an increase of four American cents and its rate reached at 54.50 American cents. Moreover according to the weekly report of USDA the exports were reduced as compared to last week and agreements were cancelled in large numbers.

Due to the news of normalization of situation in China the rate remained stable to some extent, while the rate of cotton increased by Rs 300 to Rs 400 per candy.

The industries minister Hammad Azhar in an interview said that government wants that export oriented industry should be given permission to operate partially with the condition that industrialists follow the standing operating procedures.

Governor State Bank of Pakistan Raza Baqir has announced a refinance scheme to save the industrial workers from lay off and to solve the payment problem.