KARACHI: Due to continuous fall in cotton prices, there is a crisis like situation in the cotton market. Business volume is also low. There is a difference of Rs 2,000 per maund in the rate of cotton according to quality.
Cotton prices continued to fall in the domestic cotton market last week. Textile mills are buying cautiously, while ginners are selling cotton without any bargaining, due to which cotton prices are skyrocketing.
According to reports, there is going to be a huge increase in the price of gas, which will have a negative impact on the business.
APTMA patron-chief Gohar Ijaz has been appointed as the Federal Minister of Commerce and Production. He used to complain to the government that Faisalabad and Lahore had been turned into graveyards of the textile sector. However, now he himself is trying to solve this problem but still the textile sector is not getting any relief.
On the other hand, recession continues in foreign countries. Earlier, the markets were affected due to the conflict between Ukraine and Russia. Now the conflict between Palestine and Israel has become worrying.
There is a huge recession going on in the local and international markets regarding the demand and rates of cotton. The quality of local cotton is declining day by day, due to which its price is also decreasing.
On the other hand, there is a dispute going on between the Pakistan Cotton Ginners Association and the Agricultural Crop Reporting Department of Punjab regarding the cotton production figures in Punjab province. There is a difference of 13 lakh bales in the figures of both the departments.
Every year, the Cotton Crop Assessment Committee comprising all the stakeholders sets cotton production targets but surprisingly, not a single meeting of the CCAC has been held so far. CCAC will determine the exact production of cotton in Punjab.
However, acting federal Trade and Production Minister Gohar Ijaz has said cotton production in the country is expected to be around 12 million bales this year, while farmers' organization Farmers Etihad says the federal minister is overestimating. Due to cotton production, farmers will get lower price of footi.
Depending on the quality, the rate of cotton in Sindh ranges between Rs 13,500 to Rs 16,000 per maund. The rate of footi is around Rs 5500 to Rs 7000 per 40 kg.
Cotton rates in Punjab range between Rs 15,000 to Rs 16,000 per maund while cotton rates range between Rs 6,000 to Rs 7,200 per 40 kg.
In Balochistan, cotton rate is between Rs 15,500 to Rs 15,700 per maund and cotton rate is between Rs 7,000 to Rs 8,500 per 40 kg.
The Spot Rate Committee of Karachi Cotton Association reduced the spot rate by Rs 8,000 per maund and closed it at Rs 16,000 per maund.
APTMA has discussed the key challenges with Commerce, Energy Ministers and FBR officials. In its meeting with the Commerce Minister, APTMA appreciated the role of the Minister in managing the exchange rate and controlling volatility.
The Commerce and Energy Ministers were apprised of the energy issues faced by the industry. Particularly the high electricity tariff of 16 cents/kWh currently charged from the industry and the uncertainty regarding availability and prices of gas/RLNG.
The Ministers informed the Members that a solution is close to be found to ensure availability of gas/RLNG to the industry, and the price disparity is also being addressed.
APTMA appreciated the efforts of the Ministers to resolve the industry issues but an acceptable solution to the power related problems faced by the textile industry is still pending.
As is always discussed the textile industry has an export potential of $2 billion per month, out of which the industry with export potential of $650 million has been closed. If electricity prices remain high for exporters, a large number of companies will close down.
There has been an unprecedented decline in commodity prices in the local cotton market. It is feared that due to this, cotton cultivation will reduce next year.
The Federal Committee on Agriculture has reduced the cotton production target from 12.7 million bales to 11.5 million bales.
Speaking at a function at the Pakistan Cotton Ginners Association (PCGA) in Multan on Thursday, he highlighted the need for use of modern technology for better production of cotton as well as other crops.
He said ginning factories would run on improved cotton and the government had approved new universities. The Governor appreciated the steps of the Punjab Government.
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