Source: Business Recorder

RECORDER REPORT | Oct 16, 2020

KARACHI: The Spot Rate Committee of the Karachi Cotton Association on Thursday has increased the spot rate by Rs 100 per maund and closed it at Rs 9900. The local cotton market remained stable on Thursday. Market sources told that due to increase in the rate of cotton the buyers were not taking interest. The rate of cotton reached at ten year high of Rs 10,200 per maund.

Cotton Analyst Naseem Usman told that supply of Phutti is 19% less than previous year. The rate of cotton is increasing due to the non availability of quality Phutti in the market. Naseem also said that due to the high prices ginners in Lower Sindh were closing the mills adding that instead of making cotton ginners were involved in trading of Phutti.

He also told that the Federal Board of Revenue will not charge additional custom s duty (ADC) and regulatory duty on the import of various items of textile sector. The regulatory duty would not be applicable on the import of woven fabrics of artificial filament yarn, woven fabrics of artificial staple fiber, and few other items.

All Pakistan Textile Mills Association and Pakistan Ready Made Garments Manufacturers and Exporters Association Wednesday rejected the frequent increase in the prices of gas and electricity, as the move, they say, continues to make Pakistan's products uncompetitive in the international market.

Naseem said that this year Afghanistan has a record crop of cotton and the quality is also said to be very good. Cotton is being exported to Pakistan which is estimated to be around 200,000 bales. Yesterday Afghani cotton trade deals ranging from Rs 10,150 to Rs 10,200 were recorded. He further said that government should allow the import of quality cotton seeds as they had allowed the import of cotton from abroad.

ICE cotton futures edged down on Wednesday as investors took profits after the recent rally and the ongoing harvest in major crop producing regions weighed on the natural fibre.  Cotton contract for December fell 0.20 cent, or 0.3%, to 68.63 cents per lb, at 1:19 pm EDT (1719 GMT). It traded within a range of 68.55 and 69.39 cents a lb.

The December contract rose to a near eight-month high of 69.47 cents per lb earlier this week. "Cotton is too high for the amount of supply in the US and the world," said Louis Rose, director of research and analytics at Tennessee-based Rose Commodity Group.

The Federation of Pakistan Chambers of Commerce and Industry's (FPCCI) businessmen panel on Sunday regretted that cotton crops yield has declined by almost 50 per cent, adding that the major cash crop that could contribute significantly in the development in the agriculture sector and economic prosperity of the country.

FPCCI Secretary General Ahmad Jawad said cotton under cultivation area and production declined significantly, as growers shifted from cotton to sugarcane and maize so its output slashed from 15 million bales to 8 million bales, said a press release issued here.

He said that in totality, this had caused losses to the tune of $36 billion over the last one decade. While production of cotton in India, Brazil, USA and other countries had increased manifold but it was on decline in Pakistan, he added.

Ahmad Jawad said that because of importing cotton from abroad, the cost of the textile sector increased by 6 percent so this sector became uncompetitive compared to other countries. Cotton growers are deeply concerned about the declining harvest, from 14.8 million bales to 9.8 million bales, and production is expected to go down further this year, according to the Sindh Abadgar Board (SAB).

Cotton growers are suffering losses worth billions of rupees due to lack of quality seeds, pest attack and susceptibility of cotton to climate change, said the association of farmers in a statement issued after a meeting. "This year has only added to the misery of cotton growers," remarked Trade Development Authority of Pakistan (TDAP) member board of directors Mahmood Nawaz Shah.

Naseem further said that growers initially suffered due to poor quality seeds as the government allowed sale of seeds with 50% germination and that too at a higher price than last year, he said and highlighted that the international standard for germination was more than 90%.

"Poor regulation has led to the doubling of seed quantity in crops as many growers have to plant seeds twice in the field," said SAB member Dr Zulfiqar Yousafani.

"With all the added expenditure and complications, cotton was cultivated over more than 1.5 million acres in Sindh, which was affected by record-breaking rains followed by flooding in August that hit fields in the peak harvesting season," he added. (Source: Business Recorder)