Slow down in cotton picking provides firmness to domestic cotton

Slow down in cotton picking seen due to recent rains in the cotton belt and also forthcoming Eidul Azha and Hindu festival has provided firmness to the domestic cotton. However, it is mostly observed that the current rains have not damaged the standing cotton crop in any notable way.

In Sindh due to better quality of seed cotton the rates were higher by Rs 50 per 40 kilogrammes. Thus on Thursday the seed cotton price in Sindh was said to have ranged from Rs 3400 to Rs 3550 per 40 Kgs, while in the Punjab the seed cotton prices extended from Rs 3000 to Rs 3350 per 40 Kgs, according to the quality.

Lint prices moved higher over the past few days due to slowdown of seed cotton arrivals. The lint prices Sindh are said to have ranged from Rs 6750 to Rs 6850 per maund (37.32 Kgs), according to the quality. In the Punjab, lint prices extended from Rs 6850 to Rs 6950 per maund, according to the quality. Thus cotton prices have been firm and stable over the past couple of days despite reports that textile sector is not doing so well. Generally speaking, the better textile units are able to make their ends meet, but the smaller units are mostly in difficulty.

The mills which are making polyester cotton yarns are not doing well and are facing significant problems. Several mills are also reportedly closed as they cannot sustain the cash losses.

Domestic lint prices are expected to remain firm in the near future due to short local supply. In this connection, the four percent import duty on cotton is a drag on the spinning sector. The Karachi Cotton Association (KCA) has also conveyed to the government to keep import and export of cotton free of taxes as the cotton economy of Pakistan is the largest employer in Pakistan and also contributes to the exchequer significantly. Over the past several decades, only free cotton trade has delivered the maximum benefit to the people of Pakistan and the country at large.

The 75th plenary meeting of the International Cotton Advisory Committee (ICAC) is being held from the 30th of October to the 4th of November, 2016 in Islamabad. The delegates will spend three days in Faisalabad which is one of the locations where a sizeable portion of the Pakistan textile industry is established.