Weekly Cotton Review: Mixed trend witnessed in local market

 Mixed trend was seen in the rate of cotton. Pakistan Cotton Ginners Association successfully conducted Cotton Revival Conference. Positive steps are being taken to increase the production of cotton in the country.

Federal Minister for National Food Security and Research Syed Fakhar Imam announced that thirty thousand ton of certified cotton seeds have been developed. He also said incentives will be given to farmers. Recommendations for the betterment of cotton sector will be presented.

Foreign minister Shah Mahmood Qureshi said that support price for cotton should be announced immediately.

Bearish trend was witnessed in the local cotton market during the first four days of the week due to the cautious buying by the mills and increase in selling by the ginners due to the fear of decline in the rate of cotton. However, on Thursday evening despite an increase of 3.35 American cents was witnessed in the Rate of Promise (Waday Ka Bhao) of New York Cotton and February 5 Kashmir Day holiday needy textile mills started buying after that bullish trend started prevailing in the market. Ginners increased the rates and stop selling cotton. The ginners adopted the policy of “wait and see”. In this way over all mixed trend was witnessed in the rate of cotton during the last week.

The rate of cotton in Sindh was in between Rs 10,200 to Rs 10,600 per maund. The rate of Phutti which is decreasing day by day is available in between Rs 4000 to Rs 4700 per 40 Kg. The rate of Banola is in between Rs 1600 to Rs 1900 per maund. The rate of Khal and oil remained stable. The rate of cotton in Punjab is in between Rs 10,400 to Rs 10800 per maund. The rate of Balochi cotton is in between Rs 11300 to Rs 11400 per maund. The rate of Phutti is in between Rs 4000 to Rs 5400 per 4o Kg. The rate of Banola is in between Rs 1700 to Rs 2000 per maund. The rate of cotton in Balochistan is RS 11000 per maund. The stock of only 7000 bales remained left in Balochistan. Phutti of Dalbadin is available in small quantity at the rate of Rs 5500 to Rs 5600 per 40 kg.

The Spot Rate Committee of the Karachi Cotton Association has decreased the spot rate by Rs 100 per maund and closed it at Rs 10700 per maund.

Chairman Karachi Cotton Brokers Forum Naseem Usman told that international cotton market remained a little bit bearish in the initial days of the trading during the last week but on Thursday evening after the release of USDA weekly export report the Rate of Promise (Waday Ka Bhao) of New York Cotton increased by 3.35 American cents. Although, the export volume was 16 % less as compared to the last week report.

Sources claimed that American President Joe Biden has hinted to restore reconciliatory policy with China. Meanwhile, China is the biggest buyer of American cotton this week while Pakistan on number three. If both China and USA reached at an agreement the economic situation of both the countries will improve while it has a positive impact on the global economy. However, during the week the rate of cotton remained stable in China, Brazil and Central Asian states while fluctuation was seen in the rates of cotton in India.

Last Wednesday Pakistan Cotton Ginners Association organised stake holders’ conference on the topic of “To Develop Consensus among the Stakeholders on Revival of Cotton Crop”. The conference was addressed by Federal Minister for National Food Security and Research Syed Fakhar Imam and Foreign Minster Shah Mahmood Qureshi. It is pertinent to mention here that Shah Mahmood Qureshi remained chairman Farmers Association of Pakistan for many years.

In his address foreign Minster Shah Mahmood Qureshi termed the production of mere 5.6 million cotton bales in Pakistan as “alarming”, called for enhanced collaboration among all stakeholders including growers, ginners, weavers and exporters to revive the vital cotton crop and boost its production. Qureshi said that enhanced cotton production was vital for economic development due to its contribution in various sectors including textile, edible oil etc. besides being a source of income for rural women. The Foreign Minister said that unfortunately the cotton production in Pakistan was badly hit due to shifting of cotton areas to sugarcane crop and the lack of research for new varieties of quality seeds. He said that with enhanced production of rice, maize and expected improvement in wheat in the country, the only concern now was decreased cotton production.

The Foreign Minister, however, added that as Prime Minister Imran Khan was stressing for increased Pakistan-China cooperation in agriculture sector, the cooperation in that area will enhance in the second phase of China Pakistan Economic Corridor (CPEC). He also urged the need of enhanced modern research in the field of cotton seeds and said that the country will not achieve socio-economic development and progress until its growers prosper.

Minister for National food Security and Research Syed Fakhar Imam said that government would provide subsidized seed for cotton growers in order to revive and enhance local output of major crop of the country. Addressing a seminar Fakhar discuss the issues and challenges faced by the local cotton crop and aspects to enhance productivity for economic development of the country, he said that cotton was one of most important crops in the country, which contributing about 19.03 percent in National GDP. He stressed the need for ensuring the crop zoning in order to stop farmers from switching to other crops which would be largely beneficial for agriculture sector development and economic growth. He was of the view that declining output of cotton from last many years was a matter of concern that required serious attention to revive it on sustainable basis and economic uplift of the country.

The minister said that unavailability of high yielding, certified, hybrid seed varieties were the main hurdle in domestic output, besides provisions of pesticides to control the pest attacks, which every year destroy crops standing over million of hectares. He said that cotton crop development was vital for attaining economic growth and social prosperity, adding that to achieve the true crop production potential use of hybrid varieties were much required, besides it needed to replace with conventional seeds.

The minister stressed the need for revamping seed production technologies in order to enhance per-acre crop output and maximize farmers’ income to complete in international markets as well as fulfilling the domestic raw materials needs of the industry. Cotton crop was grown over 3.8 million acres in Punjab and 1.6 million acres in Sindh Province, he said adding that last year a vast area in Sindh under cotton crop was damaged due to pest attacks. The local farmers were far behind in term of income as compared the farmers of other countries, he said adding that the local farmers received Rs 40 to 50 billion less per annum form international markets as compared to farmers of other countries. He informed that local seed requirements were estimated at 40,000 tons and government would provide subsidy on cotton seed for enhancing local output. Besides, he said that all possible resources would be utilized for the development of agriculture sector and prosperity of farming community in the country.

Chairman Pakistan Cotton Ginners Association Dr Jassu Mal Limani revealed during his speech that due to severe decline in cotton production up till now 800 units of ginning industry had closed their units. The cotton ginning industry has the ginning capacity of two crore bales but the capacity is reduced to 55 lac bales due to decline in cotton production. Textile industry has an important role in GDP. Instead of relying on imported cotton we should evolve a comprehensive strategy for increasing the production of cotton in the country. Limani said that there is a need to follow the foot steps of the countries progressing in cotton production.

Former chairman Sohail Mahmood Harl while giving his suggestions said that government should abolish all kinds of taxes including sales tax and other taxes for the revival of cotton so that farmers can get reasonable price. Sohail called for implementing cotton crop zoning in letter and spirit. There should be strict ban on sowing any crop in cotton belt. Government should allow import of GMO cotton seed and Non GMO cotton seed. Government has ensured availability of interest free loans to the farmers. Government should ensure availability of electricity on competitive rates to ginning sector like textile sector. Government should constitute Cotton Control Board having representation of all stake holders. The government should announce a support price of Rs 5,000 per maund.


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