KARACHI: The new season of cotton has partially begun. There has been an increase in the partial arrival of cotton from Sindh. From June, many textile factories will partially start operating.
Head Transfer of Technology Central Cotton Research Institute Multan Sajid Mahmood has emphasised the need of stopping cultivation of sugarcane and rice on cotton land.
All Pakistan Textile Mills Association (APMTA) and Pakistan Yarn Merchants Association (PYMA) appealed to regional countries for level playing field facilities, saying the culture of making promises and not fulfilling them should be ended, and practical steps should be taken.
A delegation of Pakistan Cotton Ginners Association and Pakistan Cotton Brokers Association met Habib Bank Limited’s President Muhammad Naseer Saeed for the solution of their issues.
Muhammad Naseer assured the delegation that their issues will be resolved.
APTMA has demanded relief in the upcoming budget. However, it is expected that the interest rate will be 15% by June 2025.
In the local cotton market, a slowdown was observed in the prices of local cotton during the last week, due to a significant decrease in the international cotton prices. The low stock of cotton resulted in a completely low business volume. The limited purchasing of cotton by textile and spinning mills, due to their poor condition, has led to a daily decline in the textile sector, with more units shutting down or operating partially.
According to sources, cotton purchases will be made cautiously in the upcoming season, which will prevent the chaos seen in the previous season. The main reason for this is the relatively low international cotton prices. Importers say that large textile groups have already signed import agreements for 4 to 5 lakh bales from foreign countries.
The majority of the country’s industrialists, including representatives of the textile sector, say that for the past several years, they have been submitting reports and holding meetings with the government to address the problems faced by the textile sector, demanding provision of energy and interest rates comparable to regional countries, and payment of billions of rupees stuck in refunds with the Federal Board of Revenue.
The Pakistan Yarn Merchant Association also appealed to the government through advertisements on Thursday to provide a level playing field, but the relevant authorities have continuously ignored these demands and appeals. As a result, industries are shutting down, and unemployment and poverty are continuously increasing.
A delegation from APTMA recently met with Federal Minister of Finance Muhammad Aurangzeb and Power Sector Ministers to discuss reducing the burden of energy costs on industries.
The meeting was held to assure the reduction of energy prices, as per tradition. However, it has been observed for a long time that ministers, advisors, and high officials, including the Prime Minister and Finance Minister, hold meetings and make assurances but do not take concrete actions. This culture of making promises and not fulfilling them should end, and positive actions should be taken instead.
The 2024-25 cotton season is expected to start partially in the country from June 25th. Currently, partial arrivals of cotton have started from several areas of Sindh. Some textile factories in Sindh will partially start operating before Eid al-Adha, and an increase in business is expected after the Eid.
On Wednesday, a meeting of PCGA and PCBA ginners and cotton brokers was held in Multan, in which consultations were held regarding the business problems faced by the textile and cotton brokers.
The Spot Rate Committee of the Karachi Cotton Association has kept the spot rate unchanged at Rs 19,700 per maund.
The Chairman of the Karachi Cotton Brokers Forum, Naseem Usman, informed that fluctuations have been observed in the prices of cotton in the international cotton market, and the price of New York cotton for July delivery has settled at 75.85 American cents per pound.
According to the USDA’s weekly export and sales report, for the year 2023-24, 1 lac and fifty six thousand and five hundred bales of cotton were sold. China topped the list by purchasing 63, 600 bales, followed by Vietnam with27,600 bales, and Pakistan with 22, 600 bales.
For the year 2024-25, one lac forty thousand and six hundred bales of cotton were sold, with El Salvador leading the list by purchasing 90, 800 bales, followed by Mexico with 16,100 bales, and Honduras with 10, 200 bales.
Meanwhile, in the budget 2024-25, the textile industry has demanded zero duty on industrial spare parts, dyes, chemicals, and gas generators. The industry has also demanded the continuation of duty-free import of cotton, expansion and acceleration of export financing schemes up to the full value chain, payment of export financing scheme refunds, and reduction of import duty on yarn by 2% and abolition of anti-dumping duty.
According to details, the export industry has proposed a set of changes to the customs duty structure for the upcoming budget 2024-25 to provide the desired incentives for the country’s industrial activities, which include zero duty on industrial spare parts, dyes, chemicals, and gas generators.
According to the proposals shared with the Ministry of Finance, Commerce, and FBR, the continuation of duty-free import of cotton is essential for the industry, as the total consumption of cotton in Pakistan exceeds 15 million bales.
A joint meeting of the Pakistan Cotton Ginners Association and Pakistan Cotton Brokers Association was held at PCGA House, Multan, chaired by Chaudhry Wahid Arshad, Chairman of Pakistan Cotton Ginners Association that extensively discussed the problems faced by cotton ginners in their business and also had a detailed discussion on the role of Pakistan Cotton Brokers Association in addressing these issues. Chaudhry Wahid Arshad, Chairman PCGA, mentioned the various issues faced by the ginners in his address. He emphasised that unless we cooperate with each other and conduct our trade in a transparent and honest manner, we will not be able to make progress, nor will our country be able to progress.
Major Kashif Islam (retd), Chairman of the Brokers Association, proposed in his address that all buying and selling should be done through a written agreement, which should include all terms and conditions, and should be signed and stamped by all parties involved, to prevent any party from deviating from the agreement.
He assured the ginners of the Pakistan Cotton Brokers Association’s full cooperation in resolving their issues. It was decided in the meeting that a joint agreement would be formed to reduce business problems. PCGA Chairman Chaudhry Wahid Arshad, Suresh Kumar, Senior Vice Chairman, Rana Waseem Hanif, Vice Chairman, Haji Muhammad Akram, former Chairman, Sohail Mahmoud Harl, former Chairman, and Muhammad Mazhar Shoaib Khan agreed to the proposal.
Chaudhry Wahid Arshad said that we should all do business with honesty and integrity, as it is everyone’s right to earn a living and provide for their families, and no one should infringe on anyone else’s rights.
The meeting was also attended by Chaudhry Muhammad Khalid Bashir, Khawaja Farooq, and Akram Zia, Qayyum Akhtar Shah, Hassan Ahmed, Khawaja Zahid Latif, Muhammad Tariq, Naeem Abid, Abid Zaidi, Sandoz, Muhammad Ajmal Chughtai, Muhammad Aamir, Muhammad Waqar, and Muhammad Naseem.
However, a delegation of the Pakistan Cotton Ginners Association (PCGA) met with Muhammad Nasser Suleiman, President of Habib Bank Limited. The meeting discussed the issues faced by cotton ginners.
The PCGA delegation demanded a reduction in the interest rate and subsidy. The President of Habib Bank Limited assured the PCGA delegation that the issues of ginning factories would be resolved. He said that the interest rate is expected to decrease to 15% by June 2025.
Sajid Mahmood, head of the Technology Transfer Department at the Central Cotton Research Institute in Multan, stated that sugarcane and rice crops in cotton-growing areas pose a significant threat to both cotton crop and underground water resources. He noted that rice cultivation has expanded to over 8 million acres, with each kilogram of rice requiring 4,500 litres of water. The rapid increase in rice farming in southern Punjab and Sindh is alarming, as it severely depletes underground water resources for annual exports worth $3 billion.
Sajid Mahmood emphasised the need to enforce crop zoning laws to benefit national agriculture. He highlighted the importance of cotton for economic stability but pointed out the lack of a dedicated cotton policy. He criticised the cultivation of water-intensive crops in cotton zones, the absence of support prices for cotton, and the textile industry’s insufficient collaboration with research institutions and cotton farmers, all of which threaten the future of cotton farming.
Copyright Business Recorder, 2024