KCA official spot rate unchanged amid bullish trend

KARACHI: The local cotton market remained bullish on Monday. Market sources told that trading volume was low. Pakistan is working on a new textile policy which will certainly help the country maintain the current tempo of growth, said federal Minister for Planning, Development and Special Initiatives Asad Umar.

Speaking at a meeting with the business community at the Faisalabad Chamber of Commerce and Industry (FCCI) on Friday, he pointed out that the textile boom, being witnessed in Faisalabad, clearly indicated that the city was the main beneficiary of current government’s policies.

He dismissed the allegation that the previous textile policy was not implemented in true letter and spirit and added that its positive results were reflected in the textile boom.

“Now the government is focusing on a new textile policy, which is aimed at stabilising the gains of present policy,” he said.

Cotton Analyst Naseem Usman told that the worldwide attention given to the plight of the Uighurs in the Chinese Xinjiang province has led to a conscious policy adopted by the US retailers, who are now worldwide, to shun all products that may be tainted by the forced labour of the Uighurs. Recently the Hindustan Times of India reported that the buyers of Ikea and H&M have “stopped new cotton purchases from Xinjiang province.” Most exporters of textiles to the US in Pakistan have also been asked to explain the “source” of their cotton and yarn. US law stipulates that products made from slave, forced, or even badly paid, or poorly treated workers shall not be sold in the US. Most retailers pride themselves on their being socially and environmentally correct. Any hint in the press of a retailer tainted by a suspect supply chain brings about a strong consumer reaction. Consumers boycott not only the suspect products but the whole retail chain as well. The disclosures of poorly treated Bengali workers in the factories supplying to Nike and other western products a few years ago is a conspicuous example.

Almost all the cotton grown in China is grown in its Xinjiang province. This is very substantial and comprises almost 20% of the world crop. A boycott like this means that any firm who has any exports to the US market will not buy any products made from Xinjiang cotton or cotton yarn. So the Chinese exporters have started looking for yarn suppliers abroad to feed their factories. Consequently, the prices of cotton yarn in Pakistan and worldwide have shot up.

Meanwhile, Pakistan’s oil and gas production has continued to drop due to depletion of existing reserves while exploration firms have frequently failed to find large hydrocarbon deposits to bridge the deficit for over a decade.

The country’s reliance on fuel imports is on the rise, which consumes a significant amount of foreign currency reserves. Demand for oil and gas has grown with a gradual pickup in economic activities, including industrial production and agricultural harvests, following a reduction in Covid-19 cases.

Besides, the household demand for electricity is gradually picking up pace with the purchase of electrical and electronics products like split air conditioners, LED TV, refrigerators, deep freezers and laptops.

The prospects of gradual restoration of trade ties with India have suddenly increased after a deal to maintain peace at Line of Control and the government may, in the first phase, allow the cotton import through land route.

Just two weeks ago, Adviser to the Prime Minister on Commerce Abdul Razak Dawood had ruled out the possibility of importing cotton from India to bridge the yawning domestic shortfall. But a breakthrough over 2003 ceasefire agreement on the Line of Control between Pakistan and India has provided an opportunity to the commerce ministry to revisit the decision.

Sources in the Ministry of Commerce told that the adviser may take a decision on whether to import cotton and yarn from India next week. They said that the issue of cotton shortfall has already been brought to the notice of Prime Minister Imran Khan. Once a principled decision is taken, a formal summary will be presented before the Economic Coordination Committee of the cabinet, they added

The sources said that in-house deliberations have already begun but the final decision would be taken only after seeking the approval of Prime Minister Imran, who also holds the portfolio of the commerce minister

“I cannot say yes or no at this stage and would be in a better position to respond on Monday,” said Dawood while responding to a question on whether Pakistan was considering allowing cotton import from India.

Naseem Usman told that 200 bales of Multan were sold at Rs 11800 per maund and 200 bales of Sadiqabad were sold at Rs 12400 per maund. Naseem also told that rate of cotton in Sindh was in between Rs 10,300 to Rs 11500 per maund. The rate of Phutti in Sindh is in between Rs 4000 to Rs 5900 per 40 kg.

The rate of cotton in Punjab is at Rs 12500 per maund. The rate of Phutti in Punjab is in between RS 4500 to Rs 6100 per 40 kg. The rate of Banola in Sindh was in between Rs 1600 to Rs 2000 while the price of Banola in Punjab was in between Rs 1800 to Rs 2250. The rate of cotton in Balochistan is Rs 12000 per maund.

The Spot Rate remained unchanged at Rs 11900 per maund. The price of Polyester Fibre was increased by Rs 5 per Kg and was available at Rs 215 per Kg.

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