KARACHI: After stability in cotton prices, a decline now is expected. Business volume has; however, improved along with increase in Phutti supply. There are concerns about decrease in cotton quality and quantity after November 15. Total production is expected to be around 60 lac bales, and thus approximately 50 lac bales to be imported. Import contracts for around 30 lac bales have already been finalised, and more being negotiated.
All Pakistan Textile Mills Association (APTMA) demands 4% decrease in interest rate, saying its $10 billion investment is at risk. Dr Gohar Ejaz has said over 1 million families are now at poverty threshold due to ongoing crisis.
According to Pakistan Textile Exporters Association due to curtailment of gas supply to Captive Power Plant gas the textile export industry is at standstill.
Head Transfer of Technology Central Cotton Research Institute Multan Sajid Mahmood said solid steps are required for restoration of cotton sector.
International Cotton Association’s first Pakistani president Muhammad Bashir has said government of Balochistan has approved the Balochistan Organic Policy, calling for promoting integration, diversity, and cooperation in the cotton industry.
The local cotton market experienced stability in cotton prices after the previous week’s decline. Business volume remained satisfactory. Textile and spinning mills continued cautious buying while supply of Phutti has relatively improved.
The PCGA cotton production report was also positive, indicating better cotton arrivals until November 1. After October 15, quality and quantity are expected to decrease. Total cotton production is estimated to exceed 60 lac bales, but spinners may need to import around 50 to 60 lac bales. Currently, import contracts for 30 lac bales have been reported.
According to the report, there is a slight increase in textile sector exports, but overall, the textile sector is not doing well. The reasons include unusually high energy costs, delays in refunds, high interest rates, and other issues. Specifically, textile spinners are facing significant difficulties due to the large-scale import of cotton yarn, which has caused distress among them. The financial crisis is also intensifying. In Lower Sindh, the quality of cotton is deteriorating, while in Punjab province, quality is relatively lower in some areas. There is a downward trend in cotton prices in the international market.
The rate of cotton in Sindh as per quality is in between Rs 17,000 to Rs 18,000 per maund. The rate of Phutti is in between Rs 7600 to Rs 8,400 per 40 kg.
The rate of cotton in Punjab is in between Rs 17,500 to Rs 18,100 per maund. The rate of Phutti is in between Rs 7,300 to Rs 8,400 per 40 kg.
The rate of cotton in Balochistan is in between Rs 17,000 to Rs 17,300 per maund. The rate of Phutti in Balochistan is in between Rs 7,600 to Rs 8,400 per 40 kg.
The Spot Rate Committee of the Karachi Cotton Association kept the rate unchanged at Rs 17,600 per maund.
Chairman of the Karachi Cotton Brokers Forum Naseem Usman has said that after a mixed trend in international cotton prices, the New York cotton futures price remained between 70 to 72 American cents per pound.
According to the USDA’s weekly export and sales report, one lac and sixty nine thousand and seven hundred bales were sold for the year 2024-25. Vietnam topped the list by purchasing thirty four thousand and two hundred bales, followed by Pakistan with thirty thousand and eight hundred bales, and China with twenty seven thousand and five hundred bales.
Exports totalled ninety eight thousand and four hundred bales. Pakistan ranked first by importing twenty seven thousand and five hundred bales followed by Bangladesh with thirteen thousand and six hundred bales, and India with thirteen thousand bales.
The Pakistan Textile Exporters Association has urged the government to reconsider its decision to suspend gas supply to captive power plants effective January 1, 2025. PTEA Chairman Khurram Mukhtar stated that halting gas supply will disrupt the $19 billion textile export industry, affecting timely fulfilment of export orders and potentially leaving millions of workers unemployed.
The industry had installed captive power plants worth billions of rupees in compliance with government policy, and this decision will affect 1280 captive power plants. Captive power plants are essential for ensuring uninterrupted power supply to automatic textile machinery and protecting against voltage fluctuations.
According to Sohail Pasha, Chairman of Pakistan Textile Exporters Association captive power plants are essential to ensure uninterrupted power supply to automatic textile machinery as well as to save them from fluctuations.
He also said Captive power plants are essential for industry due to their ability to simultaneously produce electricity and steam.
However, All Pakistan Textile Mills Association (APTMA) has demanded a 400 basis points reduction in interest rates. APTMA Chairman Kamran Arshad said that immediate action is necessary to alleviate financial pressure in the current economic environment. He said that high interest rates are hindering the growth of the textile sector, while a real interest rate of 10.6% is unbearable. He demanded bold measures to reduce borrowing costs, as inflation has dropped to 6.9%, but interest rates remain at 17.5%.
Separately, Dr Gohar Ejaz said in a tweet that investments worth over $10 billion are at risk. More than 10 lac families associated with the textile industry are on the brink of poverty. The government’s export assistance scheme is utterly unfair.
The newly appointed President of the International Cotton Association (ICA), Muhammad Bashir, has achieved a significant milestone as the first Pakistani to lead the global organisation. Bashir, who is also the head of Gul Ahmed Textile Mills, emphasised his commitment to promoting inclusivity, diversity, and collaboration in the cotton industry. His goal is to increase representative leadership and ensure that every voice is heard, regardless of gender, culture, or industry background. He views his presidency as a platform to promote development and equal opportunities, advocating for success based on merit and inclusivity.
Bashir emphasised the importance of uniting all supply chain sectors to find effective solutions to the challenges facing the cotton industry, such as climate change, currency fluctuations, and changes in legislation. He stressed the need for diverse perspectives to navigate the complexities of the industry, urging increased participation from producers, retailers, and various regional sectors.
As president, Bashir strives to protect stakeholders’ interests and promote sustainable solutions. He encourages collaboration and innovation to address industry challenges and ensure a bright future for the global cotton community.
Bashir’s extensive experience includes serving on various boards, including Gul Ahmed Energy, Habib Metropolitan Bank, and the International Textile Manufacturers Federation (ITMF). His services have earned him numerous awards, including the Sitara-i-Imtiaz from Pakistan and the Knight of the King, Northern Star Order from Sweden. With a 23-member board, ICA continues to represent the global cotton supply chain, reinforcing its commitment to connecting with the international cotton community.
Sajid Mahmood, Head of Transfer of Technology Department at the Central Cotton Research Institute in Multan, has emphasised that the revival of cotton cannot be achieved through mere advertising or grandiose claims; it necessitates concrete, actionable measures. He highlighted that individual efforts alone will not suffice for the revitalization of the cotton sector in Pakistan. The initiatives undertaken by various public and private cotton research institutions have proven inadequate in addressing this pressing crisis. Since 2016, the cotton industry has experienced a consistent decline, underscoring the urgent need for a coordinated approach.
To effectively combat this ongoing crisis, it is imperative to alleviate the financial challenges facing the Pakistan Central Cotton Committee (PCCC) at the national level. As the apex body, the PCCC should serve as a collaborative platform for both public and private institutions to initiate comprehensive research and development programs for cotton. Only through this collaborative effort can all stakeholders in cotton research and development work together to restore and enhance this vital sector.
A unified framework will enable efficient resource allocation, streamline research initiatives, and foster innovation, ultimately leading to sustainability and growth in cotton production in Pakistan. Without this collective commitment, the revival of the cotton sector remains unattainable.
Dr Jassu Mal, after being appointed as a Chairman of Pakistan Cotton Ginners’ Association, has initiated a campaign to revitalize the cotton crop in Pakistan. He has met with government officials, industry leaders, and agricultural experts to discuss strategies for increasing cotton production and resolving the cotton issues. He emphasises the importance of cotton to Pakistan’s economy and farmers, and he is committed to surpassing the cotton production of countries like Brazil, Australia, and India. He calls for unity among cotton ginners and farmers to achieve this goal.
Copyright Business Recorder, 2024