KARACHI: The Spot Rate Committee of the Karachi Cotton Association on Friday has increased the spot rate by Rs 100 per maund and closed it at Rs 9850 per maund.

The local cotton market remained bullish on Friday. Market sources told that trading volume is also increasing. Sources told that it is expected that rate of good quality cotton will reach at Rs 10,500 per maund in one or two days.

Cotton Analyst Naseem Usman told that the cotton production in the country witnessed an alarming decline of 2.8 million bales, according to a report released by Pakistan Cotton Ginners Association. The report says that more than 5 million bales were produced in the country which is 35.67 percent less as compared to more than 7 million bales produced till December 15 last year.

According to the statistics released by Pakistan Cotton Ginners Association till December 15 local textile mills bought more than 4.1 million bales which is around 35.06 percent less as compared to the last year buying of more than 6.5 million bales during this period. The ginners had the stock of more than 800,000 bales which is 35.06 percent less as compared to the last year stock of more than 1.2 million bales.

According to the report 384 ginning factories are running as compared to 424 ginning factories which were working last year during this period.

In Punjab 2.9 million bales were produced which is 1.4 million bales less as compared to the last years production of 4.4 million bales. In Sindh 2.8 million bales were produced which is 1.3 million bales less than the last years production of 3.3 million bales.

Naseem Usman while commenting on the report said that this year Pakistan's textile sector is running on full capacity due to which the demand of cotton may reach more than 10 million bales. He told that around 6 million bales will be produced in the country around 7 million bales of around 6 billion dollars will have to be imported from abroad in order to full fill the demands of the local industry.

Mean while, cotton prices on Thursday climbed over 2% to their highest level since April 2019, propelled by a strong weekly exports sales report and hopes for more US economic stimulus and its likely fillip to demand for the natural fibre.

The cotton contract for March was up 1.59 cent, or 2.1%, at 77.24 cents per lb by 11:56 a.m. EST (1656 GMT). It traded within a range of 75.51 and 77.34 cents per lb.

"There's a lot of enthusiasm in the market, a lot of optimism, especially surrounding new stimulus bill in the US," said Bailey Thomen, cotton risk management associate with StoneX Group.

"Another factor contributing is that the export sales were really strong once again. We might be seeing a little bit of shortage if we continue to have this much demand," she added.

Pakistan Cotton Ginners Association (PCGA), while rejecting imposition of 1.5 percent turnover tax on cotton byproducts, said the step would force the ginners to shutdown their businesses.

PCGA President Dr Jassu Mal said that despite the assurance by the Federal Board of Revenue (FBR) high ups and relevant ministries, the government had not taken any step to withdraw the 1.5 percent turnover tax on cotton byproducts.

Mal said that this step by the FBR would immediately increase input costs of cotton farmers by Rs100 per 40kg, which would further discourage the farmers.

Naseem told that 2000 bales of Saleh Pat were sold at Rs 9300 to Rs 9600 per maund, 6000 bales of Khair Pur were sold in between Rs 9300 to Rs 9700, 600 bales of Bagho Bahar were sold at Rs 10,100, 4200 bales of Rahim Yar Khan were sold at Rs 10050, 800 bales of Yazman Mandi were sold at Rs 10050, 200 bales of Kot Sabzal were sold at Rs 10,000, 600 bales of Faqeer Wali, 600 bales of Haroonabad were sold at Rs 9900, 800 bales of Mian Wali were sold at RS 9650 and 400 bales of Hasil Pur were sold at Rs 9200.

He told that rate of cotton in Sindh was in between Rs 9000 to Rs 10,000 per maund. The rate of cotton in Punjab is in between Rs 9500 to Rs 10,000 per maund. He also told that Phutti of Sindh was sold in between Rs 4000 to Rs 4700 per 40 kg. The rate of Phutti in Punjab is in between Rs 4000 to Rs 5200 per 40 Kg.

The rate of Banola in Sindh was in between Rs 1350 to Rs 1800 while the price of Banola in Punjab was in between Rs 1700 to Rs 2000. The rate of cotton in Balochistan is in between Rs 9200 to Rs 9500.

The Spot Rate Committee of the Karachi Cotton Association has increased the spot rate by Rs 100 per maund and closed it at Rs 9850 per maund. The Polyester Fiber was available at Rs 168 per Kg.

Copyright Business Recorder, 2020