Bearish trend was witnessed in trading of the cotton of new season. The price of cotton decreased by Rs 400 per maund. Imposition of sales tax affects the business. Achievement of target of production of 1 crore 50 lac bales according to the vision of Prime Minister Imran Khan is difficult. The production of 1 crore 20 to 25 lac bales is expected.
In the local market during the last week the demand of Phutti is increasing. The textile and spinning mills are not showing their interest in the buying of cotton of new season of 19-20. Due to the opening of new factories in Sindh the bearish trend was seen in the market.
The trading of cotton of new season opened at Rs 8800 to Rs 9000 per maund but the prices decreased by Rs 400 to Rs 500 per maund. The trading prices of cotton on Friday and Saturday were in between Rs 8350 and Rs 8400 per maund. The price of Phutti decreased by Rs 200 to Rs 300 per 40 kg. In the beginning Phutti sold at Rs 4100 to Rs 4200 per 40 Kg after that it was sold at Rs 3650 to Rs 4000. Similarly the price of Banola was Rs 1800 which was decreased by RS 200 per maund after that it was in between Rs 1600 to Rs 1650. Overall bearish trend was witnessed in the trading of new crop of cotton, Phutti and Banola.
According to information received from Sindh 20 ginning factories had started their operation while on or two factories are starting their operations daily. Due to the increasing heat wave the demand of Phutti is increasing. While news of partial arrival of Phutti from Punjab is coming but there were rains in cotton growing areas of Punjab which is useful for the crop.
The ginners had the stock of approximately 2 lac 50 thousand cotton bales. The price of stocked cotton bales is in between Rs 7500 to Rs 9000 per maund. Karachi Cotton Association Spot Rate Committee has decreased the rate by Rs 100 per maund and closed it at Rs 8700 per maund. The Karachi Cotton Association will announce the rate of new cotton crop from July.
The ginners are opposing the imposition of 10 percent sales tax on cotton announced by government in budget. The ginners were of the view that Miller's should deposit this tax. Talks are under way between All Pakistan Textile Mills Association and Ginners in this regard. The emergency meeting of Pakistan Cotton Ginners Association is going to be held on June 23 in Bahawalpur in which matters of taxes, present stock of cotton, plan of action for next cotton season and other matters will be discussed.
Chairman Karachi Cotton Brokers Forum told that satisfactory news are coming from the cotton production areas of Sindh. However it is premature to say anything regarding production of cotton but it is hoped that production of cotton will be more as compared to last year. If Punjab produced 70 percent cotton then it is not satisfactory. The farmers in Punjab in cotton sowing areas are giving priority to rice and corn. Moreover, the government has increased the rate of sugar which will give boost to sowing of sugar cane in cotton sowing areas.
Prime Minister Imran Khan had showed his resolve of growing 1 crore 50 lac bales of cotton during 19- 20 in November last year due to which all the concerned departments were active, seminars were conducted and the trainings were given to the farmers for increasing the production of cotton. Agriculture Ministries Malik Noman Ahmad Langrial said 95 percent target of cotton sowing in Punjab has achieved. Agriculture spokesman told APP that minister said this during a meeting of Cotton Crop Management Committee. He said that government has set the target of production of 8 million cotton bales from 53 lac acres in 19-20. The government is using all the resources to achieve the target. He told that sowing has completed on 50,51,117 acres of land in Punjab which is 95.31 percent of the set target and 8.93 percent more than last year.
Chairman Karachi Cotton Brokers Forum said that it is clear from the statement of agriculture Minster Punjab Malik Noman Ahmad Langrial that it is expected that 80 lac bales will be produced in Punjab while the production of cotton in Sindh is expected to be 45 lac bales. It is estimated that one lac bales will be produced from Balochistan and Khyber Pakhtunkhwa. The total expected production of cotton will be 1 crore 26 lac bales. It means that estimates of Federal Agriculture Committee of 1 crore 50 lac bales and estimate of Senate Committee of production of 1 crore 52 lac bales will not be achieved. However, it is difficult to say anything because crop has to pass through different stages but after the statement of agriculture Minster Punjab it is difficult that target of 1 crore 50 lac bales will be achieved.
Experts were of the view that estimates of government departments were hypothetical they should give estimates after complete survey. The trade suffered irreparable loss due to wrong estimates and textile and spinning mills faced difficulties in policy making.
Moreover sowing of cotton has completed. Many ginning factories in Sindh have started ginning. Up till now trading of 10 thousand bales has been completed but the government fails to evolve cotton policy. The government fails to determine the price of Phutti as well as the government fails to announce the support price of Phutti as well as fails to announce the program of buying of 5 lac bales through TCP.
Over all mixed trend was seen in international market but bearish trend was seen in the rates of New York Cotton Market. The fluctuation in dollar rate, news regarding crop and trade conflict between China and America and rising tension between America and Iran and decrease in exports as compared to last month were the reasons of bearish trend.
Fluctuation was seen in the prices of cotton in India while mixed trend was seen in China. It is expected that ice will melt on China and USA trade conflict between the expected meeting of Chinese and American Presidents in the coming G- 20 meeting.
The talks are under way with the government on taking back the zero rated status from export oriented sectors, imposition of 17 percent GST and imposition of 10 percent sales tax on cotton due to which business is suffering.