Stocks decline, prices remain stable

NASEEM USMAN

KARACHI: The prices of cotton remained stable. The stocks are declining. The prices of cotton would increase if the government had not taken back the decision of imposing import duty on cotton in January. The delivery of imported cotton has started and the mills having the facility of Duty and Tax Remission for Exporters (DTRE) is exempted from duty.

In the local cotton market during the last week textile and spinning mills were involved in cautious buying. The ginners were interested in decreasing the stocks due to which the rate of cotton remained stable. The trading volume remains medium. The needy mills were involved in buying according to their needs while ginners are selling cotton according to their calculations.

The big textile groups are hoping that government will lift ban on import duty of cotton from January although mills having the facility of DTRE are exempted from import duty while other mills who imported cotton are looking towards government through All Pakistan Textile Mills Association (APTMA) for lifting the ban on import duty on cotton. Pakistan Cotton Ginners Association (PCGA) sources said that government should lift ban on the import of cotton in February so that farmers can sell their stock of Phutti and ginners can sell their stock of cotton. The tussle between APTMA and PCGA continued on lifting the ban on import of cotton. More over the delivery of imported cotton has started.

The rate of cotton in Sindh is between Rs 7000 to Rs 9000 per maund while the rate of Phutti is in between Rs 3000 to Rs 4200 per 40 Kg. In Punjab the rate of cotton is in between Rs 7800 to Rs 9000 per maund while the rate of Phutti is in between Rs 2800 to Rs 4400 per 40 kg. According to ginners the sale of cotton remained limited but the rate of Phutti is increasing which is not understandable while ginners are also buying Phutti. In Balochistan cotton was available in limited amount. The rate of cotton in Balochistan is in between Rs 7600 to Rs 8500 per maund.

The Spot Rate Committee of Karachi Cotton Association has increased the rate of cotton by Rs 50 per maund and closed it at Rs 8800 per maund.

Chairman Karachi Cotton Brokers Forum Naseem Usman said that mixed trend was seen in international market. The Rate of Promise (Waday Ka Bhao) of New York Cotton has increased due to the decreasing of intensity of trade war between America and China. The rate of cotton remained stable in China while the downward trend was witnessed in the prices of cotton in India. The reason behind the downward trend in the prices of cotton in India is due to crisis like situation of Indian textile sector and the second reason is the economic sanctions on trade between India and Pakistan there was no import of cotton from India while Pakistan was the biggest importer of Indian cotton for the last many years.

The second meeting of the Cotton Crop Assessment Committee was held last week in which the reviewed estimate of production of cotton is 94 lac fifty thousand and 170 kg bales which is seven lac bales less from the earlier estimate of one crore 2 lac bales while the initial estimate was 37% less from the estimate of 15 million bales. Moreover, according to the private sources it is expected that production of cotton will be 87 lac bales of 160 Kg.

Moreover, chairman PCGA Javed Sohail Rehman said that with the efforts of his team Federal Board of Revenue had decided to abolish 5 percent sales tax on Cotton Khal and summary was sent to Economic Coordination Committee for approval. It is hoped that decision regarding this will be taken in the next meeting of ECC.

The textile sector is facing crisis due to the increase in the prices of power and due to the power shortage. The exports are effecting due to increase in prices of power as well as its shortage.