RECORDER REPORT | Jun 22, 2022
LAHORE: The Spot Rate Committee of the Karachi Cotton Association (KCA) on Tuesday increased the spot rate by Rs 200 per maund and closed it at Rs 20,800 per maund. The local market remained firm and the trading volume remained satisfactory.
Cotton Analyst Naseem Usman told that rate of cotton in Sindh is in between Rs 20,800 to Rs 21,000 per maund. The rate of cotton in Punjab is in between Rs 20,500 to Rs 22000 per maund. 2000 bales of Tando Adam were sold at Rs 21000 to Rs 21,100 per maund, 1000 bales of Sanghar were sold at Rs 21000 to Rs 21150 per maund, 200 bales of Shah Pur Chakkar were sold at Rs 21000 per maund, 400 bales of Hyderabad were sold at Rs 21000 per maund, 200 bales of Burewala were sold at Rs 2200 per maund and 400 bales of Chichawatni were sold at Rs 21800 to Rs 22000 per maund.
Naseem also told that in order to achieve the goal of value addition, it is important to emphasize that the international Man-Made Fiber (MMF) to cotton ratio is 70:30, while in Pakistan it has remained at 30:70 for the past several years, making it difficult to increase our share of international textile trade significantly.
We cannot dream of higher economic growth without moving into value-addition, particularly in the highly productive textile sector, where the predominant focus is on cotton. Textile millers need to prioritize the use of specialized yarn and tap into the growing market for sportswear and athleisure.
Relying on short staple fiber raw cotton is a myopic approach that essentially centers a shrinking market while neglecting the high demand for MMF products.
Meanwhile, the MMF tariff regime prevents Pakistan from aligning its products in tandem with the rest of the world. The demand for MMF has grown exponentially owing to the convenience it affords as a cheap material used in the production of the ever-relevant active-wear trend.
As for cotton, Pakistan has potential and capacity to produce 20 million bales annually. Under these circumstances, we are unable to understand that why we should be spending $ 3-4 billion on import of cotton every year when this can be grown domestically. A focused high-powered commission on cotton must be established immediately.
The sector’s zero-rating must be reinstated, given 80 to 90 percent of its products are exported, as the collecting and refunding costs are more than the sales tax yields. There is a total collection Rs 18 billion, while exporters suffer in the form of delayed, deferred and pending refunds.
According to a recent IMF report, the cascading impact of GST has significantly harmed Pakistani exporters’ competitiveness.
The Spot Rate Committee of the Karachi Cotton Association on Tuesday increased the spot rate by Rs 200 per maund and closed it at Rs 20,800 per maund. The Polyester Fiber was available at Rs 325 per kg. (Source: Business Recorder)