June 02, 2022

Easier trend on cotton market.

The local market on Wednesday was easy and the trading volume remained low.

 Cotton Analyst Naseem Usman told that the rate of cotton in Punjab and Sindh is in between Rs 21000 to Rs 22,000 per maund. He also told that rates of cotton and Phutti witnessed a decrease of Rs 1500 in two days.

The new Kappas from Pengriyo, Samaro were sold at Rs 9000, The rate of new Kapaas of Chor Jamali was in between Rs 9000-9100 and the rate of Tando Bhago was in between Rs 8800-9000. The rate of Kappas of Digri, Kunri was Rs 8800-9000 while the rate of Mirpur Sakharo, Gharo, Ubaro was Rs 8500-8800 and Gularchi, Berani, Kadhan, Badin was Rs 8800-9000.

All Pakistan Textile Mills Association (APTMA) urges the government to continue with the Regionally Competitive Tariffs for the entire value chain and not to impose any non-tariff barrier on raw material or spare parts for the industry.

Exports of textiles and apparel increased by 23 percent year on year to $15.4 billion in 2020-21, up from $12.5 billion in 2019-20. Textile exports grew by 26% in the first 10 months of this fiscal year, from $ 12.7 billion to $ 16 billion. Furthermore, by the end of the fiscal year in June 2021-22, clothing and textile exports are expected to earn $ 21 billion significant contribution to supporting the Balance of Payments deficit.

Textile exports are expected to increase to $ 27 billion next financial year as a consequence of the new capacity installed through TERF & LTFF over the last year.

Furthermore, there are speculations that the Government is considering Non-Tariff Barriers (NTBs) through a voucher scheme to curtail raw material imports. The impact of any non-tariff barrier on raw material imports would be disastrous.

Changing/discarding a winning formula can lead to extremely negative outcomes. Regionally Competitive Energy Tariffs (RCETs) across the value chain, as well as an unrestricted import of raw materials and spare parts for exports are essential for a rapidly the growing textile exports.

Mian Kashif Zia Chairman PHMA (North Zone) and Chairmen and representatives of other textile associations said that the increase in interest rates is a poison killer for the industry.

Mian Kashif Zia said that in order to increase the country’s exports, the value added textile sector would have to be given equal facilities like the competitive countries and it was necessary to continue the policy initiative of electricity and gas at special rates. All the traders and industrialists of the city termed electricity, gas and other issues as a bigger threat to the value added textile sector than Corona, said Mian Kashif Zia, Chairman Pakistan Hosiery Manufacturers and Exporters Association (North Zone). He said this while addressing a press conference at his office.

Atif Munir Sheikh President FCCI, Jawad Asghar Chairman Yarn Association, Shehzad Ahmad APBUMA, Ameer Ahmad Vice Chairman PTEA, Rana Abdul Ghafoor Embroidery Association, Khurram Akhlaq Chairman Power Loom Association, Waheed Khaliq Rame Chairman Power Loomzoners Association, Chaudhry Salamat Ali Former Central Chairman PHMA, Dr Khurram Tariq Former Central Chairman PHMA, Syed Zia Alamdar Former President Chamber, Mian Farrukh Iqbal, Former Senior Vice Chairman PHMA, Hafiz Rashid Mahmood and other industrialists and businessmen and PHMA executive members also attended.

Mian Kashif Zia said that in order to increase the country’s exports, the value added textile sector must be given equal facilities as the competitive countries. He said that it was important to continue the policy of electricity and gas at special rates. If this was not done then not only the industry would be shut down but also millions of workers would become unemployed. He said that in order to get rid of external debts, value added textile exports should be increased so as to avoid dictation of IMF.

Atif Munir Sheikh President Faisalabad Chamber of Commerce and Industry (FCCI) said that the government has to take our problems seriously and solve all the problems in the textile sector as soon as possible. He said that we have no political agenda but we want to strengthen the sinking economy by increasing the country’s exports and for this it is necessary to take all stakeholders into confidence.

Waheed Khaliq Rame Chairman Power Loom Owners Association said that our industry is also close to closure. If the present government does not reduce the electricity rates, not only the workers but also the owners will be on the streets.

Shakeel Ansari, chairman of the Sizing Association, said that the prices of our raw materials have doubled even before the rise of the dollar, and it has become very difficult to do business in such circumstances. He said that the government should immediately announce relief to the textile industry in consultation with all stakeholders.

Dr Khurram Tariq former Central Chairman PHMA said that we are not seeking any subsidy from the government in terms of electricity and gas but electricity and gas should be given to the textile sector according to their cost. He said that the entire burden of non-recovery is placed on our industry. This raises the price of electricity and gas for the industry and the entire burden is borne by our industry.

Moreover, ICE cotton futures were little changed on Tuesday but were headed for their biggest monthly drop in more than two years pressured by a stronger dollar and forecasts for rain in key growing regions of West Texas.

Cotton contracts for July fell 0.27 cent, or 0.19%, to 139.15 cents per lb, at 1:29 p.m. ET. It traded between 139.05 cents and 142.00 cents a lb. The contract was down 8.6% so far this month.

“It seems to be a little more rain in the forecast for West Texas and the U.S. dollar is up today,” said Keith Brown, principal at cotton broker Keith Brown and Co in Georgia.

The U.S. dollar rose across the board as Treasury yields climbed and worries over a further acceleration in global inflation kept investors’ risk appetite at bay. USD/Oil prices extended a bull run as the European Union agreed to a partial and phased ban on Russian oil and China decided to ease some COVID-19 restrictions.

Higher oil prices make polyester, a substitute for cotton, more expensive. China cotton futures on the Zhengzhou Commodity Exchange were up 0.6% at 20,515 yuan per tonne.

Chicago wheat futures fell after Russian President Vladimir Putin expressed readiness to allow blocked Ukrainian grain vessels from Black Sea ports. The Spot Rate remained unchanged at Rs 22500 per maund. The Polyester Fiber was available at Rs 305 per kg.