Cautious buying observed, rates increased
NASEEM USMAN
KARACHI: The rate of cotton increased by Rs 200 to Rs 300 per maund under the influence of bullish trend in the international market as well as due to drastic decrease in the production of cotton. There is a dire need of increasing the production of cotton on policy of “Now or Never”. It is estimated that 7 million bales of worth 4 billion dollars will have to be imported from abroad due to the low cotton production in the country.
In the local cotton market during the last week textile and spinning mills were involved in cautious buying while ginners were also involved in buying. The business to some extent was satisfactorily however in first three days of the week the business remained low. Due to threat of second wave of COVID 19 textile mills were involved in limited buying.
The statistics released by Pakistan Cotton Ginners Association till November 15 shows an alarming decline of 2.8 million bales which is 41.47 % less as compared to more than 6.8 million bales produced till November 15 last year. Due to the decline in cotton production textile mills increased their buying due to which the rate of cotton after stabling increased by Rs 200 to Rs 300 per maund. In the same way the spot rate of Karachi Cotton Association which was decreasing, also started increasing. The ginners increased the buying of Phutti keeping in mind the low production of cotton. The stocks of Phutti in the markets were sold.
The millers were indecisive and they were hesitant to buy cotton in large quantity due to the looming threat of COVID 19. On the other hand big textile groups had a little bit decreased the import of cotton because of the increasing rate of dollar. However, textile mills up till now had signed agreements for the import of three million bales.
According to the sources this year local mills will import six to seven million bales of worth 4 billion dollars to fulfil the demands of local industry. This will be a huge jolt for the already week economy of the country.
The rate of cotton in Sindh is in between Rs 8450 to Rs 9400 per maund. The rate of Phutti is in between Rs 3000 to Rs 4200 per 40 Kg. The rate of Banola is between Rs 1600 to Rs 1850. The rate of cotton in Punjab is in between Rs 8800 to Rs 9600 per maund. The rate of Phutti is in between RS 3500 to Rs 4600 per 40 Kg. The rate of cotton in Balochistan is in between Rs 8500 Rs 9200 per maund while the rate of Phutti is in between RS 4000 to Rs 5000 per 40 Kg. The Spot Rate Committee of the Karachi Cotton Association has decreased the spot rate by Rs 50 per maund and closed it at Rs 9350 per maund.
Chairman Karachi Cotton Brokers Forum Naseem Usman told that mixed trend was seen in international cotton market. The fluctuation was seen in the market after coming of the successful testing of COVID19 vaccine. The Rate of Promise (Waday Ka Bhao) of New York Cotton after reaching 71 US cent per pound reached at 68.50 cents and after that it again touched 71.50 cent. During the week fluctuation was seen in the prices. As per weekly export report of New York Cotton decline of 45% was witnessed in exports as compared to last week.
This week Pakistan was the biggest buyer after Vietnam. On the other hand the markets of Brazil, Argentina and Central Asian states remained stable while bullish trend was witnessed in Indian cotton market. The reason behind bullish trend in Indian cotton market is buying by Indian textile mills. On the other hand Cotton Cooperation of India is continuously involved in buying. According to the sources the new cotton crop has started arriving in India. Up till now around 4 million bales of cotton has arrived out of which CCI has bought 15 to 16 lac bales. The CCI had already the stock of 5 million bales.
The farmers and ginners of India were of the view that that a lot of support was provided them from the government which increases the motivation of farmers and ginners. On the other hand government of India also gave incentives to the farmers. While in Pakistan no one wants to support farmers of cotton and ginners as a result of which production of cotton is decreasing drastically every year. Due to the continuous loss Pakistani farmers are not interested in growing cotton. It is hinted that this year around 5 million to six million bales were produced in the country this year.
Chairman Pakistan Cotton Ginners Association Dr Jaso Mal soon after taking the charge of chairman is continuously trying to increase the cotton production. He is continuously holding meetings with the heads of the institutes related to cotton. Due to his efforts a cotton seminar was organized in Islamabad which was attended by Minister for National Food Security Syed Fakhar Imam and Advisor to Prime Minister on trade Razzak Dawood. More over he met Federal Industries Minister Hammad Azhar and other heads and briefed them regarding the issues faced by PCGA and gave them suggestions regarding increasing the production of cotton.
Dr Jaso Mal told Naseem Usman that cotton cultivation land is continuously decreasing. According to Jaso Mal cotton cultivation area is a little bit more than 4 million acres out of which 3 million acres of Punjab and a little bit more than 1 million acres of Balochistan and Sindh.
On the other hand at the start of cotton season the then agriculture minister Punjab Malik Noman Ahmad Langrial claimed that cotton will be cultivated on more than 4 million acres and cotton production will be around 8 million bales while the reality is that cotton was cultivated on 3 million acres of land in Punjab and according to PCGA report 2.5 million bales were produced which will be around 3 million bales at the end of the season. It is clear that former Minster doesn’t have any idea of cotton production but the fact is that concerned departments had given him wrong figures. Dr Jaso Mal said modern technology should be used as well as good quality seeds and medicines should be provided to the farmers for increasing the production of cotton. The incentives should be given to the farmers as well as support price of wheat should be fixed like other crops.
Meanwhile, Prime Minister Imran Khan has constituted a Cotton Crop Task Force under the chair of group leader of All Pakistan Textile Mills Association Gohar Ejaz. Gohar said that he had included five big textile groups who used cotton in the group. He said that they visit foreign countries as well as invite foreign experts and evolve a strategy for increasing the production of cotton.
The people related to cotton were of the view that this is the high time that we should think now and evolve a strategy for increasing the cotton production in the next season. Other wise, they showed their apprehension that farmers will not grow cotton and started taking interest in other crops then it will be difficult rather impossible to convince that they should grow cotton.
