KARACHI: The rate of cotton Rs16000, Phutti Rs8000 and the spot rate Rs15400 reached at historic high. Central Cotton Research Institute is in crisis.
All Pakistan Textile Processing Mills Association sources say industry never faced such type of crisis in its history. In the local cotton market during the last week, textile and spinning mills continued their buying. Ginners also remained busy in selling. Overall a bullish trend remained continued in the market while the arrival of Phutti in the market remained continued without interruption.
The rate of cotton in Sindh after increase reached at the historic high level of Rs16000 per maund while the rate of Phutti in Khanpur (Punjab) reached at Rs7700 per 40 kg which is highest in the season. The rate of high quality Phutti reached at highest level of Rs8000 per 40Kg. In this way, the rates of Cotton, Phutti and Spot Rate reached a historic high. Look what happened next.
During the week nominal fluctuation was observed in the rate of cotton. Due to increase in the rates of cotton, many textile mills were facing financial difficulties. Many mills were forced to buy cotton on credit. According to sources in textile and spinning mills, the dollar has risen sharply due to which the price of imported cotton has gone up.
On the other hand, delays in the delivery of cotton yarn and textile products have led to payment problems, while ship charges and hefty fares for containers are also increasing the difficulties.
Although the problems have started to decrease but textile mills have to buy cotton at high prices to cater to their needs.
The rate of cotton in Sindh is in between Rs 12000 to Rs 16000 per maund. The rate of Phutti is in between Rs 4500 to Rs 6500 per 40 kg.
The rate of cotton in Punjab is in between Rs 14000 to Rs 15800 per maund. The rate of Phutti is in between Rs 5800 to Rs 7700 per 40 kg. The rate of Banola is in between Rs 1600 to Rs 2100 per maund.
The rate of cotton in Balochistan is between Rs 14000 to Rs 15800 per maund. The rate of Phutti is between Rs 6000 to Rs 8000 per 40 kg while Banola is available between Rs 1600 to Rs 2200 per maund.
The Spot Rate Committee of the Karachi Cotton Association increased the spot rate by Rs 400 per maund and closed it at Rs 15400 per maund. Chairman Karachi Cotton Brokers Forum Naseem Usman told that overall a bullish trend prevails in international cotton markets. The Rate of Promise (Waday Ka Bhao) of New York Cotton remained stable. Meanwhile, the rate crossed 112 pound but at the end closed at 114 cent.
Although, a slight decrease was witnessed in the export report of USDA as compared to last week. This time too China was on top of the list with more than one lac eighty-six thousand bales, Turkey was on number second with more than one lac forty-nine thousand bales while Pakistan imported only 12600 bales.
Bullish trend was witnessed in the rate of cotton in Brazil, Africa and China while extraordinary increase was witnessed in the rate of cotton in India and the rate of cotton per candy (356 kg) reached at Rs64500, which is highest in the history of India while Australia had completed its target of export.
According to the experts, bullish trend remained continued in the international cotton markets. Meanwhile, Central Cotton Research Institute, the biggest cotton research institute was facing severe crisis, said sources.
It was sponsored by APTMA and comes under the Ministry of Food and Research, which works to increase cotton production. It is an important institute run on cess money paid by APTMA. APTMA paid Rs50 per bail as cess but APTMA had not paid cotton cess since 2017 and they had taken stay order on it from the court.
The research institute is facing serious financial crunch due to the nonpayment of cotton cess by APTMA. Sources in the institute said that the wages of the employees had not been increased since 2017 while employees were not getting ad-hoc relief announced by the government of Pakistan. The institute's annual expenses were around Rs40 to Rs50 Crore.
There were no new appointments for the last ten to twelve years. The institution needs 750 employees but it has only 266 employees. In 2021-22, the institute prepared six new varieties of seeds.
According to the sources, newly elected chairman APTMA Abdul Nasir has promised that the association is ready to pay cotton cess amount of more than Rs2billion in twelve installments. Moreover, APTPMA was passing through the hardest time of history as the prices of raw material such as dyes and chemical have increased many times due to increase in the rate of dollar, as well as, reduction in supply due to recession in international markets.
The rate of coal and petroleum products increased manifolds, besides the suspension of gas supply has affected the industry. These views were expressed by members of the APTPMA in a general council meeting held at APTPMA house on October 25.
"In these circumstances, it is not only difficult but impossible to run value-added textile processing companies," they said. They said that to get out of this crisis, we have to make tough decisions for the survival of this important industry and all APTPMA members have decided unanimously that in a week they should control their under-process cloth so that the future of the industry should be determined.
In case textile processing has to be closed indefinitely, a meeting of the General Body will be convened soon in which the participation of all the textile processing factory owners will be required and in case of absence of the factory owners, it will be understood that they are in favour of closing down their factories.
Copyright Business Recorder, 2021