KARACHI: The local cotton market on Friday remained stable and volume remained satisfactory.
Cotton Analyst Naseem Usman told that Spot Rate Committee of the Karachi Cotton Association closed the market on Rs 12900 per maund on the first day of the cotton season of 2021-22. The rate of cotton in Sindh is in between Rs 12800 to Rs 12900 per maund. The rate of cotton in Punjab is in between Rs 13500 to Rs 13600 per maund.
The rate of new crop of Phutti in Sindh was in between Rs 5700 to Rs 5800 per 40 kg. The rate of Phutti in Punjab is in between Rs 5800 to Rs 6400 per 40 kg. The rate of Banola in Sindh is in between Rs 1900 to Rs 2000 per maund. The rate of Banola in Punjab is in between Rs 2000 to Rs 2100 per maund.
600 bales of Sanghar were sold at Rs 12800 to Rs 13000 per maund, 400 bales of Shahdad Pur were sold at Rs 12900 per maund and 200 bales of Chichawatni were sold at Rs 13500 per maund.
For the first time in the history of Pakistan, exporters have been levied with 300percent higher tax as compared to local businesses. The federal government in its budget has facilitated the local SMEs and neglected, as usual, the SMEs of export sectors.
The value added textile sector had in its budget proposals demanded of the federal government to reduce income tax as well as sales tax rates for exporters but in vain.
Globally, there are no taxes on export businesses, and where taxes are levied on exports the rate is lower than the one levied on local businesses. However, in Pakistan the situation is the opposite.
The value added textile sector is very disappointed that the government has not accorded consideration to its demands. This joint statement was made by Jawed Bilwani, chairman, Pakistan Apparel Forum, Riaz Ahmed, central chairman, Pakistan Hosiery Manufacturers & Exporters Association, Rafiq Godil, chairman, Pakistan Knitwear and Sweater Exporters Association; Feroze Alam Lari, chairman, Towel Manufacturers Association of
Pakistan; Abdus Samad, chairman, Pakistan Cloth Merchants Association, Khawaja M. Usman, former chairman, Pakistan Cotton Fashion Apparels Manufacturers & Exporters Association, Shaikh Shafiq, former chairman, Pakistan Readymade Garment Manufacturers & Exporter Association, Zulfiqar Ch., chairman, All Pakistan Textile Processing Mills Association, Khawaja Muhammad Younus, chairman, All Pakistan Bedsheets & Upholstery Manufacturers Association, Shoaib Majeed, chairman, Pakistan Denim Manufacturers & Exporters Association, Naveed Illahi, chairman, Pakistan Bedwear Exporters Association, and Yusuf Yaqoob, chairman, Pakistan Weaving Manufacturers Association.
The textile exporters demanded restoration of Zero Rating of GST — No Payment No Refund System.
Imposition of 17percent GST has made the textile exporters specially SMEs financially unviable as their precious liquidity, without any purpose, stuck up and they throughout the year face financial difficulties to fulfil their export commitments.
It is on record that 33percent SME exporters have closed their export business since imposition of 17percent GST which blocked exporters’ precious liquidity.
With the continuation of 17percent GST in 2021-22, many more SME textile exporters who managed to survive last year shall fear closure as well in the wake of liquidity pressure.
17percent GST on exports and refund after months is the key hurdle in the boost in exports. Therefore, for the sake of survival of SMEs textile exporters and employment provided, it is highly crucial to restore no payment no refund GST regime which has been tried and tested or reduce GST rate to 5percent.
Meanwhile, Mir Muhammad Ali Khan a renowned investment banker in his tweet said that services and goods exports cross $31 billion dollar mark for the first time in Pakistan’s history for the fiscal year ending on June 30th 2021.
In Bangladesh’s Mymensingh division there are bright prospects of growing more cotton, with 2,000 hectares of land targeted to be cultivated this season which was 1,800 hectares last year, said officials of Cotton Development Board (CDB) in Mymensingh.
Now some 3,500 farmers are involved in cotton production in Mymensingh, Tangail, Jamalpur and Sherpur under the division. Cotton is grown in hilly regions of Mymensingh and char areas, said CDB Executive Director Alhaz Uddin Ahammed. “There is also prospect of cotton cultivation through intercropping,” he said.
Dr Shefali Rani Mozumder, chief cotton development officer of the CDB’s Mymensingh zonal office, termed cotton an important cash crop benefitting farmers with good prices.
A farmer can produce 110 maunds to 112 maunds (one maund equals around 37 kilogrammes) of cotton per hectare of land cultivating some six hybrid varieties. Every maund is now sold for Tk 2,700. The plant can be turned into fuel and fodder while edible oil is produced from its seeds, said the official.
Bangladesh meets 99 per cent of its requirement for the raw material for textiles and garments industry through imports as its domestic production is very low. Traders, importers and millers import 80 lakh bales of cotton, spending $3 billion a year. Locally, cotton acreage and production is increasing gradually to meet a part of the domestic requirement. Production of cotton fibre declined marginally year-on-year to 1.76 lakh bales in fiscal 2020-21 from 1.78 lakh tonnes, shows the CDB data.
ICE cotton futures rose more than 1percent on Thursday, drawing on a positive sentiment from the grains market, and finding footing after posting their biggest daily decline since early April in the previous session.
Cotton contracts for December rose 1.35 cents, or 1.6percent, to 86.25 cents per lb, at 12:19 p.m. EDT (1619 GMT).
“The market seems to find some value here following the sell-off yesterday which was pretty aggressive by itself, which presented a good opportunity for buyers to jump back into the market,” said Bailey Thomen, cotton risk management associate at StoneX Group.
Prices fell over 3percent to their lowest in a week on Wednesday following a disappointing US Agriculture Department report that some traders expected to show a bigger drop in planted acres of the natural fibre.
Chicago corn and soybeans rose to their highest since mid-June on Thursday as lower-than-expected US acreage estimates a day earlier fuelled supply concerns as some crops faced hot, dry weather.
Earlier on Thursday, USDA’s weekly export sales report showed exports of 274,000 running bales for the 2020/2021 marketing year, up 33percent from the previous week but down 3percent from the prior four-week average.
Total futures market volume fell by 14,175 to 17,279 lots. Data showed total open interest gained 1,792 to 217,240 contracts in the previous session.
The Spot Rate remained unchanged at Rs 12900 per maund. The Polyester Fibre was available at Rs 210 per kg.
Copyright Business Recorder, 2021