KARACHI: There is a significant reduction of Rs 400 per maund in the rate of cotton. The rate of Phutti is also decreasing. Business volume has also shrunk. Increasing trends in the import of cotton observed and threat of COVID 19 is increasing. Lack of interest of farmers in cotton crop witnessed and cotton ginners and the people relating to cotton business are looking for new businesses. The All Pakistan Textile Mills Association (APTMA) and Pakistan Hosiery Manufacturers & Exporters Association (PHMA) have locked horns over the duty-free import of cotton yarn. In the local cotton market during the last week textile and spinning mills were still involved in cautious buying while ginners were also involved in cautious buying. The traders of Phutti were trying to sell Phutti on high rates. In this way the business of cotton is shrinking. On the other hand due to the second wave of COVID19 textile mills and industries producing textile products have adopted a cautious attitude due to which the trading volume is also decreasing.
According to the textile sector, a large number of export orders have been received from abroad this year, but everyone is worried about what will happen in the coming days. Overall, there is uncertainty and no one is able to do business openly. Although, up till now all the textile sector is busy. Prime Minister Imran Khan has given a discount in the price of energy due to which the whole industry is happy. Textile manufacturers and owners are also happy with the discount on energy prices. It is hoped that exports will increase in coming days. Moreover, bearish trend was witnessed in the rate of cotton and rate of cotton decreased by Rs 100 to Rs 400 per maund.
The rate of cotton in Sindh is in between Rs 8800 to Rs 9700 per maund. The rate of Phutti is in between Rs 3200 to Rs 4700 per 40 Kg. The rate of Banola is in between Rs 1650 to Rs 1850. The rate of cotton in Punjab is in between Rs 9400 to Rs 9700 per maund. The rate of Phutti is in between Rs 3500 to Rs 4900 per 40 Kg. The rate of Banola is in between Rs 1700 to Rs 1950. The rate of cotton in Balochistan is in between Rs 9200 Rs 9400 per maund while the rate of Phutti of good quality is in between RS 4000 to Rs 4800 per 40 Kg.
The Spot Rate Committee of the Karachi Cotton Association has decreased the spot rate by Rs 400 per maund and closed it at Rs 9600 per maund.
Chairman Karachi Cotton Brokers Forum Naseem Usman told that over all fluctuation was witnessed in rates of cotton in international market. The New York cotton market has been volatile for a variety of reasons some times due to fluctuation in the rate of dollar, some times it was effected due to the hurricane, sometimes due to the presidential elections and some times it was effected by fluctuation in exports. According to the USDA weekly export report the exports decreased by 60% but the market was not affected by it.
According to the information received in America, cotton production will be less than the estimates. Moreover, on the last day of due to the panic the Rate of Promise (Waday Ka Bhao) decreased by 1.50 cent. The situation will be clear after issuing of WASDE report on November 10. The rate of cotton remained stable in Brazil, Argentina and China. However, the increasing trend was witnessed in the rate of cotton in India.
According to the statistics released by Pakistan Cotton Ginners Association till October 31st cotton stockpiling fell a massive 43 percent to 3.45 million bales till October 31, raising concerns that the country would have to import at least 7.0 million bales worth $3 billion to fulfil domestic demand, industry officials said on Tuesday. Cotton arrivals declined 43.38 percent to 3.45 million bales against 6.09 million bales in the same month last year, as heavy monsoon along with sowing substandard seeds took a toll on total yields, said the last report released by Pakistan Cotton Ginners Association (PCGA).
Punjab and Sindh showed declines of 45 percent and 41 percent respectively in cotton production during the period under review. Both provinces had stocked 1.7 million bales each till the end of October. Last year, Punjab and Sindh stocked 3.16 million and 2.92 million bales, respectively. According to the report there is a decline of 2.6 million bales in cotton arrivals was a point of concern. "Total expected cotton arrivals are around 5.5 million bales, and there would be need to import at least 7.0 million bales, as consumption demand of local mills was around 14 million bales." As per the importers of cotton agreements for the import of 30 lac bales have been signed.
It looks that stake holders and the government is not on the same page regarding increasing the production of cotton in the country. Federal Minister for National Food Security Syed Fakhar Imam said "we are not able to produce good quality seeds but we will not import seeds". There is a permission to import cotton, cotton yarn, comber and cloth.
Advisor to Prime Minister on Commerce Abdul Razak Dawood said "We will not fix the support price of cotton it will affect exports".
Cotton farmers are saying that we are not getting good quality seeds and pesticides then why we should grow cotton crop on loss. While All Pakistan Textile Mills Association is of the view that we will import cotton if there is shortage in the country due to low production.
Ironically Prime Minister Imran Khan said that nations were not build by selling cotton and clothes. If Imran Khan had any idea regarding importance of cotton he should allocate some amount in the last year announced package of Rs 331 billion. No body knows where the amount of agricultural package was spent. While according to some dealers of cotton seed producers there is no need to worry. They are producing low quality seeds by buying low quality Banola seeds on high rates. The dealers who were involved in selling fake pesticides were sent to Bangkok and Baku but this year they will be sent to Europe and America for vacations. According to the experts cotton is being treated like orphan.
There is a ray of hope that Prime Minister Imran Khan had asked Group leader All Pakistan Textile Mills Association Goher Ejaz to constitute a cotton task force. Big five textile groups were included in the task force. It is a positive sign that private sector is showing interest in increasing the production of cotton in the country. It looks that no one was sincere with the cotton including farmers, traders of Phutti, ginners and textile mills owners. Cotton brokers, especially mobile cotton brokers were responsible for destroying the business.
The people who were involved in estimation process of cotton production they should gave new estimates of production area of cotton after conducting surveys at district level. They gave estimates by sitting in the air conditioned rooms which proved wrong for many years.
Naseem Usman said that we should think positive but some positivity should be seen on the ground. Efforts should be made for the production of good quality cotton seeds according to our environment.
Moreover, spokesperson of Pakistan Hosiery Manufacturers Association has appealed to the government for reducing the import duty on cotton yarn so that manufacturers of textile products can get cotton yarn on reasonable rate.
On the other hand All Pakistan Textile Mills Association has appealed to the government that local textile and spinning mills are working on full capacity. There is no shortage of yarn in the country. The tussle is going on in between the two important sectors.
Copyright Business Recorder, 2020