KARACHI: An alarming reduction of 2.6 million bales in cotton production is estimated this season. The total production will be around 5 million bales and about 7 million bales of cotton will have to be imported. At present, the import contracts of about 5.6 million bales have already been signed.
There was increase in cotton price by Rs 1,500 per maund. The spot rate was also increased by Rs 1,500 per maund.
It is said that All Pakistan Textile Mills Association (AMTMA) should develop a solid strategy with cooperation of concerned government agencies to increase cotton production for its survival.
However, employees of Pakistan Central Cotton Committee have been protesting against non payment of their salaries for the last eight months.
In the domestic cotton market, cotton prices continued to rise during the past week. The price of quality cotton has further increased by Rs 1,000 to Rs1,500 per maund to the level of Rs 22,500 to Rs 23,000 per maund. On the other hand increasing trend was witnessed in the rate of Phutti. The Karachi Cotton Association has increased the spot rate by Rs 1,500 per maund. Domestic cotton stocks are decreasing day by day. Letter of Credit issue is still going on due to high rate of dollar and as a result textile mills have to buy local cotton at high prices despite its low quality.
The textile sector has also started to get some boom. The demand for cotton yarn has also increased to some extent. On the other hand, the ginners who had kept huge stocks have started selling their cotton at a reasonable price. It looks that bullish trend will continue in the coming days.
Local cotton farmers are preparing to start sowing cotton for the next season. At present, due to winter, the wheat harvest is delayed. However, the farmers of Lower Sindh believe that by the end of February partial sowing of cotton will be started.
The production of cotton in the country is expected to be about 5 million bales. This year, due to floods and rains, the cotton crop was damaged especially in Sindh, but looking at the situation of the past several years, it can be said that the cotton production in the country is expected to be around 8 million bales in the next two to three years, which is a major concern for the country’s largest textile sector. Due to high rate of the US dollar, import will be difficult.
In these circumstances, it is important to increase the production of cotton. Therefore, All Pakistan Textile Mills Association should develop a strategy to increase the production of cotton in collaboration with the relevant government agencies.
The price of cotton in Sindh province is Rs.19,000 to Rs.22,500 per maund. The rate of Phutti per 40 kg is Rs 6,500 to 8,700. The rate of cotton in Punjab is in between Rs 19,500 to Rs 23, 000 per maund while the rate of Phutti is in between Rs 7,500 to Rs 10,500 per 40 kg. Binola, oil and Khal prices; however, remained stable.
The Spot Rate Committee of Karachi Cotton Association increased the spot rate by Rs.1,500 per maund and closed it at Rs.22,000 per maund.
Naseem Usman, Chairman of Karachi Cotton Brokers Forum, has said that there was an overall stability in international cotton prices. The rate of Future Trading of New York cotton was in between 85 to 87 US cents per pound.
According to USDA’s weekly export and sales report for the year 2022-23, 1 lac 71 thousand and 200 bales were sold, which is 20% less than last week.
China was at the top by purchasing 1 lac and 19 thousand 800 bales. Turkey bought 44,000 bales and came second. Indonesia bought 8 thousand 800 bales and ranked third.
Twenty thousand 200 bales were sold for the year 2023-24. Turkey was at the top by buying 18,000 bales. Thailand was second by buying 2,200 bales.
Meanwhile, Pakistan Cotton Ginners Association has released the data of cotton production in the country till January 31, according to which, during this period, the cotton production in the country was 47 lakh 63 thousand and 609 bales, which is 26 lac 57 thousand 308 bales (35.81 percent) less as compared to 74 lakh 20 thousand 917 bales produces during the same period last year.
In this period, production in Punjab province was 28 lakh 53 thousand 83 bales, which is 10 lac 15 thousand 592 bales 25.98 percent less than last year’s production of 39 lac 8 thousand 686 bales.
The production in Sindh province was 18 lac 70 thousand 515 bales, which is 16 lac 41 thousand 716 bales 46.74 percent less than last year’s production of 35 lac 12 thousand 231 bales.
During this period, textile spinners bought 41 lac 75 thousand 3 bales which is 30 lac 56 bales less than last year’s 72 lac 33 thousand 312 bales. Four thousand 900 bales of cotton were exported.
The ginners have a stock of 5 lac 83 thousand and 706 bales of cotton which is 4, lac and 12 thousand bales more than last year’s stock of 1 lac 71 thousand 605 bales while 157 cotton ginning factories are functional.
Commenting on the report, Karachi Cotton Brokers Forum Chairman Naseem Usman said that the total cotton production in the country this year will be less than 5 million bales which is a tragedy.
Considering the requirement of textile mills, about 7 million bales of cotton will have to be imported.
At present, import agreements for about 5.5 million bales have been made.
Due to L/C difficulties, the delivery of imported cotton is delayed while the price also increases due to the strong dollar. The mills will have to buy local cotton for continuation of their operations.
According to the statistics released by APTMA, the exports of Pakistan’s textile sector witnessed a significant decline of 12.4 percent which reached $1.36 billion in January 2023 from $1.55 billion recorded in the same month last year.
Separately, the protest of Pakistan Central Cotton Committee employees entered the third consecutive week, apart from Multan, Bahawalpur, Ghotki, Sakrand, Mirpurkhas, Karachi, Lasbela, Sibi, DI Khan, and Sahiwal the protest and lockout of the employees is also going on in Lahore. PCCC employees have decided to protest on the arrival of Maryam Nawaz in Multan on February 5.
General Secretary All Pakistan Cleric Association Unit PCCC Najam-ul- Saqib Bosan said that it is a matter of shame for the Ministry of Food Security that they are not clearing the arrears of the salaries of the employees. He also said that bureaucracy is the biggest obstacle in the release of salaries of the employees. He said their protest will continue till the acceptance of their demands.
Copyright Business Recorder, 2023