Formulation of new cotton policy 2020-2021 is under process. Federal Committee on Agriculture (FCA) will announce the total estimates of cotton production and the total area of cotton cultivation.
All Pakistan Textile Mills Association has presented their proposals to the government of Pakistan for the up coming budget. Pakistan Cotton Ginners has showed their reservations.
In the local cotton market during the last week no trading activity was witnessed in the cotton market due to the lock down because of coronavirus. There was no activity in the cotton market for almost two months although government has allowed some industries to start the operations partially including textile industry. After that it is expected that cotton business will resume partially in the coming days.
However, like previous years cotton traders have started agreements of purchasing Phutti on the promise of delivering which gave indications that in coming June some ginning factories of Sindh will start their operations partially. According to the received information trading agreements of 20 trucks of Phutti of lower Sindh were signed.
The agreements were signed at the rate of Rs 3300 to Rs 3700 per 40 kg and on the condition of delivery between May 25 and June 5 while forward agreements of 8 trolleys of cotton seed (Banola) were also signed at the rate of Rs 1725 to Rs 1750 per maund and on the condition of delivery till June 15.
This process will continue however no amount was deposited for forward agreements as these agreements are not permanent and prices may change at the time of delivery and sometimes agreements were cancelled also.
Chairman Pakistan Cotton Ginners Association Sohail Javed Rehman said that association will take action against those ginners who were involved in forward trading in future.
He was of the view that such deals have a bad effect on the market. Moreover, these deals also affect the business of the ginners who had the stock of 5 lac bales as well as they have also the stock of ample amount of Khal.
However, it looks evident that some ginning factories in Sindh will resume their operations in June and if the weather conditions remain favorable then it is expected that many factories will resume their operations.
During the week the rate of cotton is in between Rs 7000 to Rs 8800 per maund. Karachi Cotton Association has stabled the rate of cotton at Rs 8800 per maund for the last one and a half months.
The delivery of imported cotton to textile mills is going on while ginners had the stock of 5 lac bales and were looking for the buyers. The ginners were trying to waive off their loans while their cotton is drying day by day as there was no buyer in the market for the last one and a half months because of the lock down due to coronavirus.
Experts were of the view that cautious buying will be seen by millers in future because the mills were closed for the last one and a half months due to lock down that's why they had the stock so very small amount of cotton will be sold from the stock while ginners had to sell the stocked cotton as old cotton on less rate.
Chairman Karachi Cotton Brokers Forum Naseem Usman told that sowing of cotton in lower Sindh is in final stages. Farmers are complaining that seeds have low germination level. Farmer and ginner of Tando Adam Mian Rasheed Ahmed told that he started sowing after taking seeds very cautiously but his experience is not good.
He also said that germination ratio of seed remained in between 30 percent to 40 percent but seeds of good level of germination are not available. Complaints of many farmers were of same kind.
The sowing season has started in many areas of Punjab. Agriculture minister Punjab Malik Noman Ahmad Langrial gave the estimates that cotton will be cultivated on 50 lac acres of land in Punjab while according to the information government has reduced the cotton cultivation area by 5 lac bales and now cotton will be cultivated on 45 lac acres of land in Punjab.
The government had not clarified that why 5 lac acres of cotton cultivation area was reduced at once however, Naseem Usman said that reliable sources told him that up till now the area under cotton production in the country could not be determined.
He said every year Federal Committee for Agriculture Islamabad formally announced the total area of cotton cultivation and estimates of cotton production in the last days of February and in the first week of March when cotton sowing started then they gave exaggerated estimates while sitting in air conditioned drawing rooms. But this year FDA will give estimates after consultation with the stake holders and after that completion of sowing season.
The cotton policy 2020-21 will be formulated after consultation with the stake holders however the long standing demand of farmers regarding the announcement of cotton support price has been ignored for years however it is hoped that this demand will be included in the new cotton policy.
Naseem Usman said in the international cotton market fluctuation in the prices of cotton remained continued. In the New York Cotton market bullish trend was witnessed over all despite of the fact according to the USDA report exports were decreased as compared to last year but due to increase in power prices the Rate of Promise (Waday Ka Bhao) reached between 57.50 American cent to 58 American cent but after words the rate closed at 55.84 American cent. The rate of cotton remained stable in China while the rate of cotton decreased in India by Rs 200 to Rs 300 per candy.
Meanwhile, while APTMA has presented their budget proposals for the up coming years and demanded relief incentives for textile industry which is facing severe crisis due to the lock down because of coronavirus.
On the other hand cotton ginners had requested Prime Minister Imran Khan through a letter to announce incentives for the ginners. In the coming days it is expected that lock down will be softened world wide. It is hoped that soon situation will be normalised and as a result of which trading activities in textile sector and cotton market will resume soon.
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