Cotton business likely to resume fully after Ramazan
RECORDER REPORT
KARACHI: Traders are hopeful that activities on cotton market will fully resume after Ramazan.
Market sources told that after the easing of lockdown by the government trading has started but it will fully resume after Ramazan.
Cotton Analyst Naseem Usman told that people associated with the cotton business as well as farmers has welcomed the decision of the Economic Coordination Committee (ECC) of the Cabinet of approving a multi-billion agriculture package of providing the farmers subsidy on fertilizers, reduction in bank mark-up on agriculture loans, subsidy on cotton seed and white fly pesticides and sales tax subsidy on locally manufactured tractors.
Naseem said that under the agriculture package, reduction in mark-up of agriculture loans to farmers at the total cost of Rs. 8.8 billion and subsidy on cotton seed at a cost of Rs 2.3 billion and white fly pesticides at a cost of Rs 6 billion were approved. The package would also include Rs 2.5 billion subsidy on sales tax on the locally-manufactured tractors for a period of one year.
While quoting the USDA Monthly Supply/Demand Report Naseem said that It was highlighted with an especially optimistic outlook for a strong recovery from COVID-19. USDA increased world consumption by 11 percent for the 2020/21 season to 116.46 million bales. That came as a surprise to most analysts.
Furthermore, USDA did not lower the 2019/20 world consumption as much as expected, cutting it by 5 percent to 105.00 million bales. Some analysts question whether consumption can even reach 100 million bales.
World production for 2020/21 was projected at 118.95 million bales; down from the 2019/20 estimate of 122.67 million bales. World ending stocks for 2020/21 were placed at 99.43 million bales; up from 2019/20 of 97.16 million bales.
Naseem Usman said that Spot Rate remained unchanged at Rs 8600 per maund. The rate of cotton in Sindh and Punjab is in between Rs 7000 to Rs 8600 per maund. The rate of polyester fiber was decreased by Rs 3 per kg and was available at Rs 157 per kg.
