The prices of cotton increased due to hike in the value of dollar. The concerned departments were active for the increase in the production of cotton. Proposals for new cotton policy are under process. The buying was low in the cloth market despite the arrival of the month of Ramadan. Several power looms were closed in Jhang Bazar due to the fraud of Rs 1.5 billion committed by cloth traders of Faisalabad.
In the local cotton market during the last week the increase in buying by textile and spinning mills the overall rate of cotton was increased. The trading volume increased. Over all the trading was done in low quality cotton due to which the prices of cotton increased by Rs 200 to 300 per maund while the prices of good quality cotton increased by Rs 100 to 200 per maund.
The prices of cotton in both Sindh and Punjab remained Rs 7200 to Rs 9000 per maund while the price of Seed cotton (Kapas/Phutti) which is available in small quantity is from Rs 3200 to Rs 3600 per 40Kgs in both Sindh and Punjab. The cotton seed was not available in Balochistan while all the seven ginning factories were closed.
The Karachi Cotton Association (KCA) increased the spot rate price by Rs 100 per maund and closed it at Rs 8700 per maund. Chairman Karachi Cotton Brokers Forum told that due to the increase in the value of the dollar the local textile mills gave priority to the local market for cotton buying. More over according to the report released by Pakistan Cotton Ginners Association (PCGA) the ginners had left the stock of only 800,000 bales out of which half of the cotton is of good quality.
According to the PCGA report the production of cotton was 10.77 million bales till April 1, 2019 registering a shortfall by 6.9 percent compared to corresponding period of last year.
Over all bullish trend was witnessed in international cotton market. According to the weekly USDA report the export of cotton was increased by 47 % due to which the prices of cotton increased in New York Cotton Market while in the Indian cotton market the prices of 356 kg Candi was increased by Rs 1500. The prices of cotton remained stable in Chinese market. The news of solution of US and China trade conflict are circulating if the conflict is solved then it is hoped that there will be positive impact of this news on the American as well as world economy. The demand as well as prices of cotton and textile products will also be increased if the trade conflict between US and China is solved.
Chairman Pakistan Cotton Ginners Association Mian Muhammad Mahmood told that a meeting was held in Islamabad on Wednesday which was attended by representatives of All Pakistan Textile Mills Association (APTMA). The proposals and strategy regarding new cotton policy were discussed and presented in the meeting. Mahmood told that incentives should be given to cotton farmers. The prices of cotton seed should be fixed at Rs 3600 per 40 Kg. It was also proposed that either import duty should be abolished permanently or should be imposed permanently. The complications occurred due to imposition and abolishing duty during the season.
The APTMA members also presented their proposals regarding new cotton policy. The proposals were sent to the Prime Minister Imran Khan for approval. Moreover, there is a crisis in the Faisalabad market which is the hub of Pakistani textile market. The traders of cloth market bought cloth of worth Rs 1.5 billion on borrowing after words they refused to give back the money. One of the cloth traders had bought the cloth of Rs 1 billion from borrowed money and refused to return the money. Similarly other traders had bought the cloth of Rs 20 to 30 crores from borrowed money and they also refused to pay back the money. Moreover, power loom owners were on strike for more than two weeks. They were demanding increase in the Over Head prices.
The prices and demand of local textile products are increasing before the start of Ramadan but the industrialists were of the view that there was a slowdown in the market as compared to the previous years before the starting of Ramadan due to increase in the dearness. The finance minister Asad Umar and Governor State Bank are trying hard to control the increase in the value of dollar.