KARACHI: The rate of cotton remained overall stable. The production of cotton will be less than the target. Fluctuation was seen in the rate of cotton in the international cotton market. The Economic Coordination Committee has decided to review the intervention price of cotton.
Has the area in Pakistan decreased that All Pakistan Textile Mills Association is building a new textile complex in Uzbekistan and cotton will also be cultivated in it?
In the local cotton market during the last week a bullish trend was witnessed due to interest of textile and spinning mills in buying, as well as, due to increase in supply of Phutti (cottonseed). Trading volume is also increasing.
News of lockdown in Sindh on Friday evening and reduction in the rate of New York cotton market caused a swing of Rs 100 to Rs 150 in the rate of cotton in market. Later, the market stabilized again.
As the international cotton markets continue to boom, many large groups of textile mills are involved in buying. On the other hand, ginning factories are also starting their operations.
According to the information received, the current production of cotton is satisfactory. Although the actual production area of cotton is less than the initial estimate, the yield per acre is said to be relatively high.
Due to arrival of rain-affected Phutti in Sindh the rate is decreased by Rs 500 to Rs 700 per 40-kg.
The arrival of Phutti is gradually increasing in Punjab. It is expected that the arrival of Phutti in Punjab will further increase after August 15. There are forecast of rains, and with an adequate rainfall, the crop will be better.
Due to delay in the shipment of imported cotton, textile and spinning mills are filling the gap by buying cotton from the local market.
Meanwhile, cotton imports are becoming more expensive as the US dollar strengthens. Last year imported cotton was available at relatively lower rates and the mills had signed agreement for the import of cotton but this year mills are cautious in buying imported cotton because the rate of cotton is at the highest level of 80 American cents to 90 American cents per pound.
Although, importers of cotton are saying that despite high rates new import agreements were signed on daily basis, but up till now import agreements of 0.5 million bales have been signed. This year, shipment rate and container rates are high as compared to last year.
However, due to the low cotton production and increase in the import of textile machinery the demand of cotton has increased locally.
In the local cotton market the demand of cotton will be in between one Crore 70 Lac to 75 Lac bales.
In this way, the volume of imports will also increase and the cost of foreign exchange will also increase.
Currently, the local cotton market is witnessing an increase in the prices of cotton as well as garments and yarn.
The rate of cotton in Sindh is in between Rs 12900 to Rs 13100 per Maund. The rate of Phutti is in between Rs 4600 to Rs 5400 per 40-kg. The rate of Banola is in between Rs 1600 to Rs 1750 per Maund.
The rate of cotton in Punjab is in between Rs 13500 to Rs 13600 per Maund while the rate of Phutti is in between Rs 4800 to Rs 6200 per 40-kg. The rate of Banola is in between Rs 1700 to Rs 1900 per Maund.
The Spot Rate Committee of the Karachi Cotton Association increased the spot rate by Rs 300 per Maund and closed it at Rs 13000 per Maund.
Chairman Karachi Cotton Brokers Forum Naseem Usman told that rate of cotton remained stable in international cotton markets. The Rate of Promise (Waday Ka Bhao) of New York Cotton remained in between 89 to 90 American cents.
There is a 3 % decrease in the export as compared to last week according to weekly USDA export report. However, the rate of cotton remained stable as the rate of US dollar decreased.
There is a trade dispute between the United States and China and China is not importing cotton from America. Pakistan is on the second number as per the export agreements of 2021-22.
Brazil's torrential rains have affected the cotton crop, leading to relatively few export deals. The rate of cotton is comparatively stable. The rate of cotton remained stable in Central Asian States.
Bullish trend prevails in the rate of cotton in India. The rate of cotton was Rs 55600 per candy (356 kg).Cotton Corporation of India continues to sell cotton. According to sources, CCI's stock of cotton is almost near ending and India will export ten lLac bales of cotton to Bangladesh.
Moreover, an MOU of APTMA with Uzbekistan remained under discussion according to which Uzbekistan will provide thirty thousand hectares of land to APTMA for the construction of trade complex and for growing cotton.
APTMA has not evolved a positive policy for increasing the production of cotton in the country while they are planning to grow cotton in Uzbekistan. Now the question arises if the APTMA will establish textile mills there and export textile products then can we say that these are the exports of Pakistan?
Now some people raise questions if the land area had decreased in Pakistan that they are getting land in Uzbekistan for growing cotton and establishing factories.
At an Economic Coordination Committee meeting held in Islamabad last Wednesday, the decision to fix the Cotton's intervention price was once again postponed to the next meeting.
While it was said that Phutti's intervention price would be Rs.5,000 and two Lac bales of Phutti would be purchased initially through Trading Cooperation of Pakistan but the decision was again postponed in Wednesday's meeting. The reason given is that the decision was taken in the last meeting in the absence of Federal Trade Adviser Abdul Razzaq Dawood and it will be reconsidered.
Circles related to cotton business says that Abdul Razzaq Dawood was against the fixing of intervention price of Phutti.
Moreover the cotton cultivation was completed on 1.821 million hectares. The target of producing 10.51 million bales of cotton through cultivation of cotton on 2.32 million hectares will not be achieved.
An official of Ministry of National Food Security and Research told that according to temporary estimates 80.88% target of production of this season crops has been achieved.
In Punjab cotton has been cultivated on 1.27 million hectares. During the survey cotton production was fixed at Rs 6.07 million bales which was estimated a 640.93 kg per hectare.
Copyright Business Recorder, 2021