Weekly review of Pakistan's cotton business
The textile sector, which plays an important role in the country's economy, exports and employment, is on the verge of collapse. The All Pakistan Textile Mills Association (APTMA) has urged the government to restore energy concessions as the industry is unable to survive as energy prices in regional countries are relatively low, making it impossible for the Pakistani textile sector to compete with them Is.
The government has withdrawn power subsidies given to five export industries, including the textile sector, to meet IMF conditions, increasing the cost of electricity from Rs 19 per unit to Rs 40 per unit. Interest was also raised by 3% from 17% to 20%, and the dollar interbank rate rose by Rs 19 to Rs 286. It had reached up to Rs 300 in the open market but later declined somewhat.
Cotton prices remained stable in the local cotton market last week. In the beginning of the week, some groups of textile mills showed interest in buying cotton. Later on Wednesday, there was a sudden rise in the dollar rate after which the ginners became cautious and started demanding higher prices, while the spinners remained silent due to higher prices.
Cotton prices in Sindh province ranged between Rs 19,000 and Rs 20,500 per head, depending on the quality, which is available in small quantities. The price of footi in Sindh ranged from Rs 6500 to Rs 8500 per 49 kg. Cotton rates in Punjab ranged from Rs 19,000 to Rs 20,000 per head, while cotton rates ranged from Rs 7,000 to Rs 9,500 per 40 kg. Cottonseed cake and oil prices remained relatively stable.
The spot rate committee of the Karachi Cotton Association increased the spot rate by Rs 2,00 per head and capped it at Rs 20,000 per head. Cotton demand and prices are expected to increase in the domestic cotton market, but cotton stocks are very low in the domestic market while deliveries of imported cotton are getting delayed due to L/C issues and sharp rise in dollar prices. This will increase the price of imported cotton.
Karachi Cotton Brokers Forum President Naseem Usman has said that cotton rates remained stable in the international cotton markets. According to the USDA's weekly export report, one lakh seventy thousand six hundred bales were sold for the year 2022-23. China remained on top by purchasing 81 thousand 600 bales. Vietnam finished second after buying 78,900 bales, including 900 bales from China and 100 from Japan. India bought 18,400 bales and stood third.
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