RECORDER REPORT | Jan 14, 2022
LAHORE: The Spot Rate remained unchanged on Thursday. The trading volume remained low and the market remained steady.
Cotton Analyst Nasseem Usman while talking to Business Recorder said that price of Punjab’s Phutti attracted per 40 kilograms prices from Rs 6000 to Rs 8500. Cotton of Sindh was traded from Rs 15000 to Rs 19000 per maund, Punjab’s cotton was traded from Rs 16000 to Rs 18500 per maund. He told that 200 bales of Rahim Yar Khan were sold at Rs 19000 per maund, 600 bales of Bagho Bahar, 200 bales of Liaquat Pur and 200 bales of Khan Pur were sold at Rs 18800 per maund.
Ministry of Commerce (MoC) said on Wednesday that issue of gas prices for the textile and apparel sectors, assumed in the Textile and Apparel Policy 2020-25 including Captive Power Plants (CPPs) are yet to be resolved.
This was revealed by Secretary Commerce, Sualeh Ahmad Faruqui during a meeting of Senate Standing Committee on Commerce when Deputy Chairman Senate, Mirza Muhammad Afridi stated that he has received information that Commerce Ministry has withdrawn Textile and Apparel Policy from the Cabinet. The meeting was presided over by Senator Zeeshan Khanzada. Secretary Commerce replied that the policy stands approved by the Cabinet but the issues related to tariffs of electricity, gas and CPPs are unresolved.
“We have taken up the issue with the Ministry of Energy to change the language of the decisions. The draft of language is near finalization and the issue will be settled,” said Secretary Commerce.
Sualeh Ahmed argued that Ministry of Energy had agreed on a price of RLNG at $9 per MMBTU for Textile and Apparel sector but due to frequent fluctuations in LNG prices at the international level, this has become an issue, and the other issue is CPPs. He further contended that only two lines are to be adjusted in the already taken decision, after which this issue would be sorted out.
The imposition of 17 percent tax on agriculture seed and machinery imports come at a time when the government is looking to promote oilseed crops through subsidies to lessen the burden on imports, Pakistan Businesses Forum (PBF) Vice President, Ahmad Jawad said. He said the tax on cottonseed and its derivatives in particular will adversely impact cotton growers and allied industries.
The maize crop, he says, is a major contributor towards the growth of the poultry industry, with 70pc of grain going into poultry feed. The dairy industry is also highly dependent on the maize crop, with silage requirements increasing day by day.
In 2020-21, almost 130,000 tonnes of grain and 80,000 tonnes of silage were exported from Pakistan, he claims, fearing that with the imposition of sales tax on maize seed, the export competitiveness of the crop will face a major challenge and hurt the livelihoods of farmers.
Rice and vegetable seeds are also facing the same predicament as the additional tax will discourage farmers from adopting high-yielding hybrid seeds, resulting in overall productivity loss and food security concerns, he apprehends, urging the government to review its decision of withdrawing sales tax exemption on key agriculture inputs and provide relief to the farmers in order to achieve projected GDP growth target; he added.
He said that economic managers is putting Pakistan at stake for a mere $1 billion” to tap IMF last tranche, despite the fact Government has received 32 billion dollars foreign remittances and 31 billion dollars have been projected in export sector by the end of financial year and Federal Board of Revenue has made tax collection of Rs 6,000 billion during current fiscal year.
He said withdrawal of sales tax exemption for various crop seeds, agriculture inputs and farm implements will have far-reaching consequences for the already struggling farming community, raising their cost of cultivation by 5 to 10 percent.
Meanwhile, in an alarming development, textile exports have dipped by 61 percent in the first nine days of the current month of January 2022. And to this effect, Finance Minister Shaukat Tarin has summoned a meeting to be held today (Thursday) evening, a senior official at the Commerce Ministry told The News.
Textile production decreased by $290 million in the first nine days of 2022, according to projections, with value-added textiles accounting for $213 million and other textiles accounting for $77 million. In terms of both value and volume, this loss translates into a 61 percent decline.
“The gas/ RLNG supply to export-oriented industries was cut off on December 15, 2021, and then restored on December 29, 2021, resulting in a permanent loss of 30pc of textile exports. And in December 2021 alone, the gas shutdown cost the country $250 million in lost exports.” ICE cotton futures rose more than 2% on Wednesday after the U.S. Department of Agriculture (USDA) lowered U.S. production and ending stocks estimates for the 2021/22 crop year, while a weaker dollar added to the upbeat mood.
Cotton contracts for March was up 2.70 cents, or 2.4%, at 118.72 cents per lb, by 01:40 p.m. ET, its highest since Nov. 24. However, the agency trimmed US exports estimate by 500,000 bales to 15.0 million bales, citing lower US crop and continuing logistical issues. The Spot Rate and closed it at Rs 18500 per maund. Polyester Fiber was at Rs 257 per kg. (Source: Business Recorder)