Sluggish trend continues in cotton market

KARACHI: The sluggish trend remained continued in the local cotton market on Wednesday. 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 after the Eid holidays with the partial arrival of Phutti for the season 2021- 22 the trading for the new season has started in the cotton market. He 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 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, 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.

All Pakistan Textile Mills Association (APTMA) has urged a long-term textile policy and continuation of Regionally Competitive Energy Tariffs (RCET) and supply of gas/RLNG for a continued investment and enhancement of production and export capacity. APTMA believed that export-led economic growth is the only viable and sustainable solution to steer the country towards a bright future.

Gohar Ejaz, Patron-in-Chief, APTMA, in a proposal to the federal cabinet has said that to avoid social, economic, and political unrest because of increasing unemployment, the ever-increasing inflation requires employment opportunities in large numbers which can only be generated through enhance investments in production capacities creating new jobs. He said that the local business community, particularly the export-oriented industry, always neglected despite the fact that it surely has the potential to steer sustainable economic growth as long as it is provided with basic policy support, and in particular, competitively priced energy. After direct raw material, energy is the highest input cost in the value chain.

On behalf of APTMA, he urged that Pakistan must target higher economic growth by prioritizing value-addition, particularly in the highly productive textile sector, where regionally competitive energy is the primary path towards real progress. During periods where regionally competitive energy tariffs were given by the government, the export- oriented industries proved the critical role of these tariffs, by immediately showing an upward trend in production, reaching full capacity, as well as creating new jobs, new investment and leading to all mills becoming operational.

According to Ejaz, Pakistan has been trapped in an unsustainable debt cycle for decades, with most recent figures depicting the balance of the current account in deficit for the fourth successive month in March at a moderate $47 million, according to Pakistan’s central bank. This foreign currency deficit is currently being financed through loans and bonds, he mentioned.

He further pointed out that there are several ways that can be considered to finance a country’s current account deficit: foreign direct investment, loans, exports and workers’ remittances.

“Short-term economic fixes will never amount to the sustainable growth needed for Pakistan’s economy, and the same is to be said of seeking IMF loans and bailouts. The country has relentlessly sought loans to achieve economic stability, which have naturally come with countless conditionality,” he added.

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

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