KARACHI: The prices of cotton remained stable. Increase in the supply of Phutti. Adequate rainfall is beneficial for the crop. Letters of Pakistan Cotton Ginners Association to State Bank of Pakistan through chambers of commerce and industry.
In the local cotton market during the last week the prices of cotton remained stable. The supply of Phutti is increasing while the textile mills which need cotton were taking interest in buying due to which the trading volume witnessed some increase. Currently, an international firm is involved in buying.
The quality of the Phutti has been affected due to being wet as a result of rains in the coastal areas of Sindh. Ginners were preparing cotton after mixing wet Phutti. The rate of this cotton is said to be one hundred to two hundred rupees less than the actual rate. Although current adequate rains are beneficial for the cotton crop.
In Sindh the price of cotton is in between Rs 8350 to Rs 8450 per maund. The rate of Phutti is in between Rs 3300 to Rs 4200 per 40 kg. The rate of Banola is in between Rs 1800 to Rs 1900.
The rate of cotton in Punjab is in between Rs 8600 to Rs 8700 per maund. The rate of Phutti is in between Rs 3400 to Rs 4300 per 40 kg while the rate of Banola is in between Rs 1950 to Rs 2050.
The Spot Rate Committee of Karachi Cotton Association has increased the rate of cotton by Rs 100 per maund and closed it at Rs 8500 per maund. Along with the new crop, the old cotton is being traded in the cotton market, but the mills are taking more interest in the old cotton. The stock of old cotton has decreased considerably.
Chairman Karachi Cotton Brokers Forum Naseem Usman told that mixed trend was seen in international cotton markets. Over all bullish trends was witnessed in New York Cotton Market. The Rate of Promise (Waday Ka Bhao) of New York cotton after increasing by 3 American cents exceeded 64 American cents. One of the reasons for this is drought in Texas, the largest cotton-growing region in the United States. Secondly on the other hand, due to the easing of the Corona lockdown, the business activities have increased. Moreover, according to the weekly report of USDA nineteen percent increase was witnessed in exports as compared to last week. This time China was the biggest buyer who bought one lac twelve thousand bales while Pakistan was at number four after importing twelve thousand bales.
The rate of cotton remained stable in China, Brazil and Argentina while the bearish trend remained continued in the rate of cotton in India. Due to adequate rains in the cotton growing areas of India it is expected that cotton will be produced in abundance. It is expected that rate of cotton will further decrease in India because Bangladesh and China were not taking interest in buying cotton from India. Cotton Corporation of India has rejected the recent report of USDA regarding cotton production in India. However, CAI is buying cotton from ginners after giving them incentives. Despite all this Indian ginners were in panic.
Moreover, according to American Cotton Acreage Report cotton was cultivated on 1.5 million acre till June 30. It is expected American cotton production has been reduced by two million bales which means reduction of 10.26 percent. Exports may decrease by one million bales. The report may bring bullish trend in the market.
According to the world production and demand report of cotton the production of cotton is expected to be 116.25 million bales which mean reduction of 2.49 million bales about 2.10 percent decrease. It is expected that demand also decreased by one lac 20 thousand bales about 0.10 percent due to coronavirus pandemic. A drastic reduction has been reported in the import and export ending stocks while there is a slight increase in the opening stock.
It is welcoming that government has abolished 5 percent sales tax on Banola Khal with the efforts of the current leadership of Pakistan Cotton Ginners Association. The association also seek the help of chambers of commerce and industries of different cities that they should play their role in solving the issue of ginners by writing letters to the governor State Bank of Pakistan urging to solve the issues faced by ginners. In this regard up till now letters were written by chambers of commerce of Bahawalpur, Vehari, Sukkur and Pakistan Business and Intellectual Forum to SBP.
Moreover, a meeting was held on July 9 in the Agriculture House Lahore under the chair of minister agriculture Punjab Malik Noman Ahmad Langrial in which CEMB ' s Pink Ball warm free cotton was discussed in detail including it's legal and scientific aspects. After that minister approved the Pink Ball Warm free cotton for Punjab and ordered that it should be available to farmers as early as possible. He also said due its cultivation the production cost of farmers will be reduced by 50 percent. In the end he thanked CEMB staff for providing valuable services to the farmers.
A second locust attack is expected for which Prime Minister Imran Khan has allocated funds.
The Textile and Export Sector has requested the government to pay the amount of sales tax, customs duty and duty drawback blocked since May 2014 as a result of which exports are being affected and exporters are facing a severe financial crisis. The government should immediately order the FBR to release the fonts immediately.
Copyright Business Recorder, 2020