September 24, 2021

Cotton yarn export MoC says ready to support RD imposition.

Commerce Ministry on Thursday is ready to support imposition of Regulatory Duty (RD) on export of cotton yarn, aimed at encouraging value addition in Pakistan.

Senior officials of Commerce Ministry showed this willingness in an informal chat subsequent to a formal meeting of National Assembly’s panel which met with Khurram Shahzad MNA in the chair.

 

“Pakistan exported cotton yarn worth $ 1 billion during 2020-21 to different countries including China. If this yarn had been used for value addition, Pakistan could have exported value-added goods,” said, Muhammad Ashfaq, Joint Secretary (Tariff Policy) Ministry of Commerce.

 

He suggested that National Assembly panel should recommend imposition of duty/ RD on export of cotton yarn, adding that the Commerce Ministry will support the proposal.

 

His views were also supported by Additional Secretary (Trade Diplomacy) Syed Hamid Ali, who stated that Commerce Ministry will endorse the proposal.

 

Khurram Shahzad MNA argued that cotton yarn worth $ 1 billion could manufacture cloth of $14billion which could be exported instead of exporting only cotton yarn.

 

A team of All Pakistan Textile Mills Association (APTMA) headed by its Chairman, Rahim Nasir noted that textile exports are likely to touch $ 21 billion during 2021-22; and that cotton production will be over 8.5 million bales this year as the crop is better than before.

 

Chairman APTMA said that Pakistan has to go for corporate farming to get better yield as is being done in other countries, adding that there should be a consistency in policies. He said cotton production has been declining for the last 15 years. Cotton production per acre in Pakistan is less than in the neighbouring and developed countries, he added.

 

The meeting was informed that APTMA has established a Cotton Foundation to develop better quality cotton seeds as the yield of other countries is far higher than Pakistan. The Foundation will develop cotton which will be virus-free and also in accordance with local weather conditions. Technology will also be imported for this purpose.

 

APTMA’s Consultant, Dr. Javed commented: “I have visited several cotton fields and met with farmers. Those who use pesticides of multinational companies are getting better yield, whereas those who use local pesticides or counterfeit seeds are facing substantial losses.”

 

Chairman APTMA did not support the imposition of RD, saying that if support is extended to one industry at the cost of another industry, it will not succeed.

 

“Policy should be formulated in such a way that the cost of production is reduced. We have to make a consistent chain,” he maintained.

 

The Convener of the panel said unprecedented incentives have been given to the exporters but exports are not increasing.

 

Chairman APTMA replied that textile exports have posted growth of 28 per cent on year to year basis whereas they were 45 per cent higher on month-to month basis.

 

He said, 28 per cent growth is a very good number and if someone thinks growth should be 50 to 60 per cent, it is not possible. He said energy availability should be at par across the country to keep cost equivalent.

 

The impact of Temporary Economic Refinance Facility (TERF) will be seen in years to come as the industry is just going for expansion, the panel noted.

 

Khurram Shahzad raised the issue of tariff protection to a couple of chemical industries.

 

Chairperson National Tariff Commission (NTC) Robina Khalid said that protection of this will be reduced gradually.

 

The panel decided to invite officials of Ministry of National Food Security and Research and agriculture scientists in its next meeting for a comprehensive briefing on seeds.

 

Besides others, the meeting was attended by Syed Javed Ali Shah Jillani MNA and Sajida Begum MNA.

September 24, 2021

Cotton rises on weaker dollar.

ICE cotton futures gained on Thursday, supported by a weaker dollar and a strong weekly US export sales report, with risk-on sentiment in the equity markets adding to the upbeat mood.

The cotton contract for December was up 0.81 cent, or 0.89%, at 91.68 cents per lb by 11:03 a.m. ET (1503 GMT). The contract is up for the third straight session.

 

“The obstacles of the Federal Reserve’s tapering and China Evergrande real estate event are sort of put on hold right now allowing the stock market rise. And the dollar is down today,” said Keith Brown, principal at cotton brokers Keith Brown and Co in Georgia.

“And, of course, cotton sales were up, with China being the lead buyer. All these factors are helping cotton prices today.”

The dollar fell 0.5% against its rivals, making cotton less expensive for buyers holding other currencies.

The sentiment in wider financial markets remained upbeat as investors largely brushed off concerns over the Federal Reserve’s plans for tapering.

Meanwhile, the US Department of Agriculture’s weekly export sales report showed net sales of 345,400 running bales for 2021/2022, were up 21% from the previous week, with increases primarily for China.

Total futures market volume fell by 6,446 to 11,197 lots. Data showed total open interest gained 202 to 262,785 contracts in the previous session.

Certificated cotton stocks deliverable as of Sept. 21 totalled 60,976 480-lb bales, unchanged from the previous session.

September 24, 2021

Modest trading activity on cotton market.

The local cotton market on Thursday remained stable and trading volume remained a little bit low.

The Spot Rate remained unchanged at Rs 12700 per maund. The Polyester Fiber was available at Rs 222 per kg.

 

Cotton Analyst Naseem Usman told Business Recorder that due to rains in the cotton areas of Sindh and Punjab may effect the quality of Phutti.

 

Federal Finance Minister Shaukat Tarin in his speech on 19th September at KCCI meeting said that the current season of cotton production in Pakistan will produce about 12 million bales.

 

The rate of cotton in Sindh is in between Rs 11500 to Rs 113100 per maund and the rate of cotton in Punjab is in between Rs 13200 to Rs 13300 per maund.

 

The rate of the new crop of Phutti in Sindh was in between Rs 4800 to Rs 5600 per 40 Kg. The rate of Phutti in Punjab is in between Rs 5400 to Rs 5800 per 40 kg. The rate of Banola in Sindh is in between Rs 1450 to Rs 1700 per maund. The rate of Banola in Punjab is in between Rs 1450 to Rs 1700 per maund. The rate of cotton in Balochistan is in between Rs 12300- 12400 per maund. The rate of Phutti in Balochistan is Rs 5900- 6400 per maund.

 

1600 bales of Khair Pur were sold at Rs 12600 to Rs 12800 per maund, 1000 bales of Rohri were sold at Rs 12600 to RS 12850 per maund, 1000 bales of Shahdad Pur were sold at Rs 11800 to Rs 12200 per maund, 800 bales of Saleh Pat were sold at Rs 12800 per maund, 600 bales of Kotri were sold at Rs 12000 to Rs 12200 per maund, 200 bales of Bagho Bahar were sold at Rs 13100 per maund, 400 bales of Rahim Yar Khan were sold at Rs 13000 per maund, 600 bales of Khan Pur were sold at Rs 13100 per maund, 200 bales of Mian Wali were sold at Rs 13000 per maund, 200 bales of Chichawatni were sold at Rs 12500 per maund, 600 bales of Layyah were sold at Rs 12800 per maund, 400 bales of Dera Ghazi Khan were sold at Rs 12700 to Rs 12800 per maund.

 

Last weekend, Pakistan Cotton Ginner’s Association (PCGA) announced fortnightly cotton arrival figures, and the numbers has delivered a shock to market players. As already reported in the press, cotton bales arrival is 160 percent higher than last year. While cynics may claim low-base effect, it is pertinent that arrivals as of mid-September are highest in at least 7 years! (PCGA fortnightly data prior to FY16 is unavailable).

 

Cotton-watchers will recall that historically, only 20 percent of the crop has been harvested by this time of the year, as second and third pickings in Punjab are yet to take place.

 

If the momentum continues, this could theoretically lead to domestic cotton output of as much as 13.4 million bales! That would be truly astonishing, as it would cancel out all previous forecasts of cotton output and import requirement during the ongoing marketing year. However, even the inter-ministerial Cotton Crop Assessment Committee (CCAC) isn’t so hopeful, while Pakistan Central Cotton Committee (PCCC) has so far placed forecast at 8.46 million bales. Has the Naya Pakistan government finally staged a turnaround in domestic cotton output?

 

To be fair, in August 2020 BR Research had noted that CCAC’s estimate of “8.46 million bales (of 170kg) appears unrealistic, considering that at 1.94 million hectares, area under cultivation is lowest since at least FY80”. Official forecast was (and still is) based on projected yield of 769 kg ha, last witnessed in FY15. Average yields have fallen dramatically since, clocking in at just 541 kg ha in FY21. For official target to become a reality, average yields would have to climb by at least 42 percent, a seemingly insurmountable challenge considering the crop has lost its best acres over the past decade.

 

Yet, PCGA’s arrival report has made impossible change into a forgone conclusion, a forecast revision rarely associated with Pakistan’s cotton crop performance. If the unbelievable output of 13.4 million bales is achieved, it would translate into an average yield of 1,180 kg ha. This would not only be the highest ever, it would also exceed country’s previous top yield of 815 kg pa by 45 percent, witnessed 10 years ago! Could it be true?

 

ICE cotton futures rose for a second straight session on Wednesday, helped by mill buying and a subdued dollar ahead of federal weekly export sales data.

 

The cotton contract for December was up 0.67 cent, or 0.74 %, at 90.70 cents per lb by 12:59 p.m. ET (1659 GMT), after hitting its lowest since Aug. 3 on Monday.

 

Total futures market volume fell by 35,805 to 17,827 lots. Data showed total open interest fell 8,727 to 263,976 contracts in the previous session.

September 23,2021

Rates firm amid modest business.

The local cotton market remained stable on Wednesday and the volume remained satisfactory.

Cotton Analyst Naseem Usman told Business Recorder that due to rains in the cotton areas of Sindh and Punjab may effect the quality of Phutti.

 

The Spot Rate remained unchanged at Rs 12700 per maund. The Polyester Fiber was available at Rs 222 per kg.

 

The rate of cotton in Sindh is in between Rs 11500 to Rs 12000 per maund and the rate of cotton in Punjab is in between Rs 12500 to Rs 13200 per maund.

 

The rate of the new crop of Phutti in Sindh was in between Rs 4500 to Rs 5500 per 40 Kg. The rate of Phutti in Punjab is in between Rs 5000 to Rs 5600 per 40 kg. The rate of Banola in Sindh is in between Rs 15500 to Rs 16500 per maund. The rate of Banola in Punjab is in between Rs 1600 to Rs 1700 per maund. The rate of cotton in Balochistan is in between Rs 12000- 13000 per maund. The rate of Phutti in Balochistan is Rs 6100- 6600 per maund.

 

400 bales of Hyderabad were sold at Rs 1200 per maund, 600 bales of Mir Pur Khas were sold at Rs 11000 to Rs 11600 per maund, 1400 bales of Nawab Shah were sold at Rs 12000 to Rs 12300 per maund, 4000 bales of Khan Pur were sold at Rs 12400 to Rs 12600 per maund, 1200 bales of Rohri were sold at Rs 12300 to RS 12600 per maund, 800 bales of Shahdad Pur were sold at Rs 11800 to Rs 12300 per maund, 400 bales of Saleh Pat were sold at Rs 12600 per maund, 200 bales of Pano Aqil were sold at Rs 12700 per maund, 200 bales of Khan Pur Mehar were sold at Rs 12700 per maund, 800 bales of Mir Pur Mathelo were sold at Rs 12800 to Rs 12900 per maund, 800 bales of Ghotki were sold at Rs 12700 to Rs 12900 per maund, 100 bales of Rahim Yar Khan were sold at Rs 13000 per maund, 200 bales of Dera Ghazi Khan were sold at Rs 12500 per maund, 200 bales of Fazil Pur were sold at Rs 12600 per maund, 1400 bales of Haroonabad were sold at Rs 12500 to Rs 12700 per maund, 200 bales of Shadan Lund were sold at Rs 12500 per maund.

 

Federal Finance Minister Shaukat Tarin in his speech on 19th September at KCCI meeting said that the current season of cotton production in Pakistan will produce about 12 million bales.

 

ICE cotton futures rose more than 1% on Tuesday, with mills taking advantage of a steep fall in the previous session to buy back some of the natural fiber, while a weaker dollar offered further support. Total futures market volume fell by 35,805 to 17,827 lots. Data showed total open interest fell 8,727 to 263,976 contracts in the previous session.