Weekly Cotton Review: Cotton rate remains stable amid low trading volume

KARACHI: The rate of cotton remained stable. Trading volume remained low. There were disagreement between the government representatives and stakeholders on the estimates of cotton production. Punjab agriculture minister expects to have production of two Crore bales but due to lack of planning it looks difficult that wish of agriculture minister will be fulfilled.

Many years back agriculture expert, Jahangir Tarin, has showed his wish that government should declare the year 2015 as year of cotton crop and also wished to have two crore bales but unfortunately in 2015 only 97 lac bales were produced. Cotton stakeholders were of the view that government ministers should avoid giving statements without a solid strategy and vision.

In the local cotton market during the last week after a bearish trend the rates of cotton remained stable, though, the trading volume remained low. An international commodity organisation is buying cotton on low rates and selling it on high rates. According to the updated information that organisation till now has bought four lac bales. Now the quality cotton is not available in the market so that organisation is selling cotton to textile spinners on high rates. It is one of the reasons of low trading volume in the market.

According to the sources this organisation up till now has sold more than one and a half lac bales and they are selling it on daily basis. According to the experts this organisation bought cotton at the start of the season due to which the ginners got good rates and the market remained stable. When the quality cotton was not available in the market this organisation sold cotton to e spinners and met their demand.

Textile mills were cautious while ginners had decreased their rates in order to sell cotton despite of the fact that increasing trend remained continued in the rate of cotton. However, textile mills are not showing interest in buying. On the other hand imported cotton will be expensive because of increase in the rate of dollar.

There is no parity between the rates of cotton as compared to rate of cotton yarn due to which it is difficult to export textile products. The rates of shipments are increasing day by day besides containers are not available on time.

Previously there was a delay in the import of cotton but now the import is increasing. It is expected that there will be financial crisis in the market after the arrival of imported cotton and delay in the payment of cotton yarn.

The rate of cotton in Sindh as per quality is in between Rs 13000 to Rs 17000 per maund. The rate of Phutti which is available in very limited quantity is in between Rs 4500 to Rs 6800 per 40 kg. The rate of Banola is in between Rs 1350 to Rs 2200 per maund.

The rate of cotton in Punjab is in between Rs 14400 to Rs 16900 per maund. The rate of Phutti is in between Rs 5500 to Rs 7800 per 40 kg. The rate of Banola is in between Rs 1500 to Rs 2200 per maund.

The rate of cotton in Balochistan which is available in very limited amount is in between Rs 15000 to Rs 16800 per maund. The rate of Phutti is in between Rs 6000 to Rs 8000 per 40 kg. The rate of Banola is in between Rs 1500 to Rs 2300 per maund. The Spot Rate Committee of the Karachi Cotton Association stabled the rate at Rs16700 per maund.

Chairman Karachi Cotton Brokers Forum Naseem Usman told that after a bearish trend during the corresponding week the rate of cotton remained overall stable. The Rate of Promise (Waday ka Bhao) of New York Cotton is in between 1.6 American cents to 1.7 American cents. According to the weekly export report of USDA more than three lac eighty two thousand bales of cotton were sold.

China was number one buyer with more than one lac four thousand bales. Turkey was number two with more than ninety six thousand bales while Vietnam was on number third with more than sixty thousands bales and Pakistan was on number fourth with more than twenty five thousand bales.

Cotton Crop Assessment Committee has also issued the easement report of the cotton production. However, Punjab agriculture minister Syed Hussein Jehania Gardezi has hinted that they are evolving a strategy to produce two crore bales. Meanwhile, ginners and cotton growers of Punjab in a meeting termed this estimate as unrealistic. They alleged that this could cause huge losses to farmers.

Pakistan Kisan Itehad and Pakistan Cotton Ginners Association had termed the production target of 5.168 million bales in Punjab as unrealistic. President Kisan Itehad Khalid Khokhar and chairman Pakistan Cotton Ginners Association Mahmood Harl while expressing their views in the meeting of Cotton Crop Assessment Committee has categorically rejected the claims of Crop Reporting Services and Agriculture department Punjab. They also alleged that representatives of the provincial government were adamant about harvesting cotton.

Khokhar said that it is wrong to say that 0.5 million bales will be produced in Punjab. In reality cotton production in Punjab will not be more than 4.1 to 4.2 million bales. In the same way it is expected that over all ten per cent more cotton will be produced 8j the country. However, contrary to the estimates of Cotton Crop Assessment Committee of the production of 9.1 million bales over all cotton production in the country will be in between 7.6 million to 7.7 million bales.

On the other hand Punjab Agriculture Minister Gardezi Wednesday urged cotton growers and other stakeholders to play their role in producing 20 million cotton bales target at any cost. Addressing a moot on cotton rehabilitation and stabilization, the minister expressed his determination to produce 20 million cotton bales at any cost and asked all stakeholders concerned to contribute in this regard at all level to meet the production target.

He said the present government was taking steps for the rehabilitation of cotton and in this regard standard and approved varieties of cotton were promoted in collaboration with the federal government. He said 19 new varieties of cotton were approved with DNA fingerprinting as an integral part of it which will help in preventing future substandard cotton seeds.

The minister said this year cotton crop has been sown on 3.16 million acres of land which would yield more than 5.168 million bales. Cotton production in Punjab province has increased by 50 percent during the current financial year as compared to last year.

Compared to the previous season, till December 1 this year, 7,168,118 bales of cotton have arrived in the factories whereas in the same period last year, 4,468,118 bales of cotton had come to the factories, he said. The factories have received 2.52 million more bales of cotton. He said 36,790,16 bales of cotton have arrived in the factories in Punjab. Last year, 2,634,487 bales of cotton came to the factories.

Naseem Usman told that a few years back Karachi Cotton Association organised a seminar in which agriculture expert Jahangir Tarin said that the year of 2015 should be announced as cotton year. Cotton production estimates should be two crore bales but due to the lack of planning only 97 lac bales were produced in 2015. Separately, All Pakistan Textile Mills Association has demanded that government should refrain from increasing the energy prices.

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