Slow trade activity on cotton market

KARACHI: The local cotton market on Thursday witnessed sluggish trend on Thursday. Market sources told that trading volume remained very thin. The situation is likely to be improved in the month of June after the start of new season.

Cotton Analyst Naseem Usman told that with the partial arrival of Phutti for the season 2021-22 the trading for the new season has started in the cotton market.

Central Cotton Institute Multan has introduced low cost and environment friendly cotton producing technology.

According to the director Central Cotton Institute Multan Dr Zahid Mahmood this technology has been named as Low Expenditure and Environment Friendly Tech (LEEF TECH).

The Punjab government allowed the Indus River System Authority (Irsa) to divert the province’s share of water to Sindh to help it complete cotton sowing and has been taking a hit of 16 percent shortage against only four percent for Sindh, claims provincial irrigation minister Mohsin Leghari.

Responding to the allegations levelled by Pakistan People’s Party Chairman Bilawal Bhutto-Zardari that the PTI-led federal government was creating “artificial water crisis to deprive Sindh of its water due,” the minister claimed at a press conference on Monday that Sindh was in fact getting more water than its due share under the water accord.

He said at present (April 1-May 10) the Punjab endured 26pc shortages against 15pc by Sindh if the water accord shares are taken as a benchmark. However, if the (Advisory Committee’s) approved criterion is taken as a rule for the same period, the Punjab’s shortages stood at 16pc and Sindh’s only 3.6pc, he added. Minister says largest province suffers 16pc shortage

The minister said that due to the excessive supply from the Mangla Dam to Sindh, through downstream Panjnad, the dam’s situation was worsening, but still Sindh was being fed. According to the plan, Mangla Dam should be filled up to 80pc by the end of June. Otherwise, it runs the risk of not getting filled.

So far, he said, Punjab has released 0.93 million acre feet (MAF) water to Sindh at the cost of 50 feet drop in the Mangla Dam. The province is unable to feed Panjnad canals as per requirements for the same reason and was facing 30pc deficit.

Despite these severe shortages, Sindh has so far released 46,000 acre feet water downstream Kotri barrage, he regretted and said Punjab was fairly distributing its share within the province and it was responsibility of Sindh to do the same within its canals instead of accusing others. “The Punjab is not the reason, nor responsible for water shortages in Karachi, Badeen, Thatha etc. It was rather taking a hit in its canals because Sindh needed additional water for cotton sowing and was being fed from Mangla. On the contrary, Irsa was not providing Punjab’s due share of water at Taunsa Barrage; the province is getting only 9,955 cusecs against the requirement of 30,000 cusecs – a shortage of 69pc,” Mr Leghari concluded.

Naseem Usman told that up till now buying and selling of Phutti from the areas of Sindh which includes Badin and Gharo were recorded. He told that ginning factories of Punjab bought Phutti at the rate of Rs 5300 to Rs 5500 per 40 Kg. Moreover, a ginning factory of Burewala had sold 200 bales of cotton at the rate of Rs 12500 per maund on the condition of delivery between June 10 to June 20. Sources claimed that two ginning factories of Sanghar will partially start their operations from 1st week of June.

Naseem told that according to the information received up till now the sowing of cotton in the cotton production areas of Sindh and Punjab is satisfactory. The Federal Agriculture Committee has set the target of production of approximately one crore five lac bales for the year 2021-22.

Naseem further said that that sowing of cotton has registered a significant increase this year in South Punjab due to the incentives given to the farmers by the Punjab government, said an official of the Punjab Agriculture Department.

Official said it was heartening to note that the farmers were taking keen interest in sowing cotton this year as compared to last year. “Reports of cotton crop sowing are pouring in from the South Punjab, right from the first week of April which are according to the wishes of the Punjab government”, the official said.

He said that crop of cotton was mostly being sown in Bahawalpur, Multan, Lodhran, Bahawalnagar and Rahimyar Khan Khanewal, Layyah, Sahiwal districts. Mahar Mahboob, a farmer from Layyah, said that he preferred to sow cotton in fields this year rather than other crops, adding that the present government was taking initiatives for the farmers. To a question, he said that cotton was a beneficial crop as the government was giving different incentives to the farmers. He also confirmed that the farmers were taking more interest in sowing the cotton as compared to the last year in the southern Punjab.

It is also pertinent to mention here that the Federal Committee on Agriculture has fixed white lint production target for the country at 10.5 million bales from an area of 2.33m hectares for the 2021/22 season, almost double over the previous year.

Punjab is to sow the crop on 1.6m hectares of land to produce 6.07m bales. The Agriculture Department has issued a schedule for sowing of registered cotton varieties and advised the growers to complete the sowing of registered BT cotton varieties between April 1 and May 31. The BT cotton varieties recommended by the department include IUB-13, MNH-886, BS-15, Niab-878, and FH-142. The growers have been asked to consult local experts if they plan to sow other registered BT cotton varieties keeping in view the environment of their district to get better production.

Meanwhile, ICE cotton futures retreated on Wednesday as weakness in broader equity and commodity markets such as crude oil and grains along with a stronger dollar seeped into the natural fibre.

Cotton contracts for July fell 1.38 cent, or 1.6% to 82.63 cents per lb by 12:51 p.m. EDT (1651 GMT). It traded within a range of 82.16 and 84.26 cents a lb.

“It’s (cotton prices) testing our long term trend line which is resting around 83 cents, (but) there’s just a lot of outside pressure (from broader markets) that’s pushing cotton down a bit,” said Bailey Thomen, cotton risk management associate with StoneX Group.

Worries over inflation and a steep fall in crypto currencies weighed on risk sentiment and boosted the dollar, in turn making greenback-denominated U.S cotton more expensive for buyers holding other currencies.

Market participants were also monitoring weather conditions in the top-cotton producing West Texas region, where recent showers have increased the possibility for an improving cotton crop.

“The (cotton) market is pretty comfortable in the mid 80 cents area and it would make sense to see it continue between this 80 to 90 cents area” in the near-term, Thomen added. Traders now await the US Department of Agriculture’s weekly export sales report due on Thursday.

Total futures market volume fell by 4,231 to 22,123 lots. Data showed total open interest gained 250 to 223,538 contracts in the previous session.

Certificated cotton stocks deliverable as of May 18 totalled 112,318 480-lb bales, up from 105,098 in the previous session.

The spot rate remained unchanged at Rs 11300 per maund. The Polyester Fiber was available at Rs 200 per kg.


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