LAHORE: Small trading activity was witnessed in the local cotton market on Thursday during the day.
Cotton Analyst Naseem Usman told Business Recorder that Spot Rate remained unchanged. He also told that rate of cotton in Punjab and Sindh is in between Rs 18000 to Rs 20,000 per maund.
400 bales of Khair Pur were sold at Rs 20, 700 (credit) per maund and 400 bales of Jalal Pur were sold at Rs 20,000 per maund.
Naseem Usman also told that irrigation water situation in Lower Sindh area is very bad. Further sowing of cotton has stopped and early sown cotton is wilting due to shortage of water
Pakistan’s cotton imports fell to 2.75 million bales during 8MFY22, down by 12 percent over same period last year. At monthly run rate of 0.35 million bales (of 170kg), full year imports may clock in a little over 4.1 million bales, against imports of 5 million bales during FY21.
Does the lower import quantum come as a surprise? Yes. Despite decade-high cotton prices in the international market, USDA has projectedPakistan’s imported cotton demand in excess of 7 million bales (or 1.1MMT). This would have been highest-ever importing volume in country’s history, against previous peak imports of 5.2 million bales in FY08, almost 14 years ago.
The bullish forecast had come on the back of both buoyant textile exports, as well as lower-than-expected domestic cotton arrivals of 7.45 million bales (of 170kg). Market watchers will recall that USDA had projected cotton consumption at 14.3 million bales for FY22, up 5 percent over the estimate for the preceding year.
Although USDA’s forecast is in line with market consensus which places domestic demand at 15 million bales, that estimate has rarely withstood the test of evidence. Between FY19 and FY21, Pakistan’s actual production + imports averaged at 12.2 million bales, down from 14.3 million bales over previous decade. Even if the difference (in its entirety) is chalked up to underreporting in local production post-imposition of GST on ginning, annual consumption maxes out at 14.5 million bales.
Meanwhile, the industrial growth lies in going global and sustaining the industrial growth through achieving the global business requirements and expanding the global market share. With the objective of bringing sustainability in textile industry, GIZ Textiles project is providing technical assistance to improve productivity, social and ecological aspects.
Addressing an exclusive session at Pakistan Textile Exporters Association (PTEA) here on Tuesday, technical expert of GIZ, a worldwide service provider in the field of international cooperation for sustainable development, emphasized the importance of ratifying and implementing international labour standards for the industrial sectors. They admitted that textile industry with its major share in the economy is Pakistan’s most important sector.
It contributes approximately 8.5% to the country’s gross domestic product and 60% of exports. Over 15 million people are employed in this sector; however, the productivity in this industry is low compared to other countries in the region. There has been little initiative for environmentally friendly growth as large quantities of water, chemicals and energy are consumed in production, they said.
The SME sector is in dire need of improving working conditions and the associated competitive potential; whereas demand from international buyers for sustainable produced textiles is increasing. Pakistan’s textile industry faces a major modernization process in which sustainable production is a success factor. They identified a number of avenues where the textile industries in collaboration with GIZ can bring improvements in the work practices thus enabling more exports to Europe. They invited the industrialists to implement the international labour standards within industries to enhance country’s WGI ranking.
Earlier, Ameer Ahmad, the Vice-Chairman PTEA welcomed the guests and briefly enlighten the core functions of PTEA. He appreciated the role of GIZ Pakistan in enhancing the compliance with global standards. He said that foreign trade has a lot of attached responsibilities as the international buyers are increasingly getting sensitive about ethical sourcing and international compliances. The textile industry is keen to collaborate with GIZ for improvement of working conditions and implementation of International Labour Standards. This move will lead to an increase the foreign trade volume of the country and would upgrade the WGI ranking of Pakistan. He assured full support and co-operation to GIZ for bringing sustainability in textile industry.
Moreover, ICE cotton futures touched their highest level since July 2011 on Wednesday, boosted by concerns of a shortfall in supply due to drought conditions in key growing regions and strong demand prospects for the natural fiber.
The most active May cotton contract on ICE futures was up 1.1 cents, or 0.9%, at 131.15 cents per lb, as of 11:04 a.m. ET. It traded within a range of 129.97 and 132.96 cents a lb.
“There are not many supplies out there to meet the strong demand and then also with the delays on shipping, nothing is able to actually get moved particularly quickly in order to fill those demands,” said Bailey Thomen, cotton risk management associate at StoneX Group.
More than half of Kansas was classified as under severe drought or worse as of March 8, the driest conditions since 2018, according to the National Drought Mitigation Center.
Severe drought is also covering three-quarters of Oklahoma and more than two-thirds of Texas, a key cotton growing area.
The Spot Rate remained unchanged at Rs 20,000 per maund. Polyester Fiber was available at Rs 285 per kg.
Copyright Business Recorder, 2022