Pakistan : Weekly Cotton Review: Rates fall amid sluggish trade; "Textile Sector Focused Towards National Importance"
KARACHI: The cotton market turned bearish last week, witnessing a fall. Significant reduction in rate from Rs.2,500 to Rs.3,000 per head. The spot rate was also reduced by Rs 2,500 per head.
Former President Asif Ali Zardari met members of the All Pakistan Textile Mills Association (APTMA) to discuss issues related to the economy, revival of the cotton and textile sector.
The intervention price of footy has come down from Rs 8500 per 40 kg. Growers say that as promised, the government should buy cotton through the Trading Corporation of Pakistan (TCP) to stabilize the price.
Javed Bilwani, chairman of the Pakistan Apparel Forum, has said that the government should refrain from implementing RCET under Section 99D on the textile sector.
In the local cotton market last week, cotton prices fell by Rs 2,500 to Rs 3,000 per head due to panic selling by ginners and low rates buying by spinning mills, creating chaos in the market.
In Sindh province, cotton prices declined from Rs 17,000 to Rs 18,500 per head, while the price of foot per 40 kg fell by Rs 1,000 to Rs 7,000 to Rs 8,000. Similarly, the spot price of cotton decreased by Rs 2,200 per head to reach Rs 17,700.
Cotton prices are expected to fall further after Eid al-Adha due to distress in the textile sector.
The government has fixed the intervention price of cotton at Rs 8,500 per 40 kg and has promised that if the price of cotton falls below Rs 8,500, the government will provide about one million rupees through the Trading Corporation of Pakistan to stabilize the price of cotton. Gant will buy cotton. At present, the price of footi has come down to a low of Rs 7,000 to Rs 7,500 per 40 kg in many areas. Cotton farmers demand that the government should start purchasing cotton through TCP as promised.
The rate of cotton in Sindh is between Rs 17,000 to Rs 18,000 per head. The rate of footi is between Rs 7,000 to Rs 7,700 per 40 kg. Cotton rates in Punjab range from Rs 18,500 to Rs 19,000 per head, while footy rates range from Rs 8,500 to Rs 8,800 per 40 kg. Cotton rates in Balochistan range between Rs 17,700 to Rs 18,000 per head. The rate of footi is between Rs 7500 to Rs 8200 per 40 kg.
The spot rate committee of the Karachi Cotton Association has reduced the spot rate by Rs 2,200 per head and closed it at Rs 17,700 per head.
Naseem Usman, president of Karachi Cotton Brokers Forum, has said that the overall bearish trend in the international cotton markets remains. The futures trading rate for the month of July closed at 78 cents.
One lakh 87 thousand six hundred bales were sold in the year 2023-24. China remained on top by buying one lakh thirty seven thousand three hundred bales. Turkey bought 24,400 bales and stood second. Honduras was third with 10,900 bales.
However, local textile mills have warned the government that a large number of export units may shut down as they have lost their competitive edge after the Regional Competitive Energy Tariff (RCET) is abolished.
The APTMA has reiterated its demand for resumption of gas and electricity supply at subsidized rates and warned that failure to do so would lead to unemployment, loss of export revenue and further deterioration in the trade balance.
Meanwhile, former President Asif Ali Zardari met APTMA leaders over revival of the economy, cotton and textile sector.
In addition, Javed Balwani, head of the Pakistan Apparel Forum, which includes representatives of Pakistan's textile sector, has said that value-added garment exporters are concerned with the proposed implementation of an additional tax on "income, profits, gains and gains" under Art. 99D. He dismissed it as a "draconian and anti-business" move by the government.
Garment exporters are already burdened with rising operational costs of manufacturing for exports. The super tax has been extended from one year to the second year. The present Government has earlier abolished the Regional and Competitive Energy Tariff (RCET), thereby depriving the exporters of a level playing field and a fair competitive environment.
