KARACHI: Cotton traders remained on the sidelines during the entire week, amid lockdown, despite the decision of the Karachi Cotton Association to keep the cotton exchange open.
The KCA had fixed the spot rate at Rs8,800/maund during the week.
Stakeholders said very little stocks were left with the ginners, but their mills were not operating because of the lockdown due to the fear of spread of coronavirus.
Pakistan Cotton Ginners Association (PCGA) has written a letter to Prime Minister Imran Khan, seeking relieve in the bank interest by the banks because there are no buyers of the commodity in the market, and the ginners have stocks of around 500,000 bales.
The banks should not charge interest from March 1 to July-end so that they enter in deals for the purchase of new crop from the growers.
Moreover, importers from Europe and the US have suspended the import orders, which affected the local mills negatively. Due to such situation, export products have been developed in huge quantity and more than 100 mills have closed their operations, while others were also on the verge of closure.
Besides, an increase in the value of dollar against the rupee has also negatively affected the cotton importers, the PCGA said.
Indian and Bangladeshi traders have appealed the US and European importers not to cancel their orders, as hundreds of thousands of workers will lose their jobs. They requested them to delay the payments, but do not cancel the orders.
Karachi Cotton Brokers Association Chairman Naseem Usman said that Pakistan’s textile ministry did not make any such request to the international buyers of Pakistani textiles.
Due to coronavirus, markets remained closed worldwide, but some deals were recorded at New York cotton market where rates increased 4 cents/pound after hitting the low rates of 49 cents/pound.
Though trading is coming to normal in China, the cotton market remained uncertain over there. Cotton trade is almost nil in India too, but rates were being issued on a daily basis, while prices remained unchanged.
Stakeholders said Pakistan has reduced the discount rate by 1.5 basis points to 11 points to provide relief to the industry, but such measures were less fruitful, as trading has almost suspended.
Meanwhile, The All Pakistan Textile Mills Association (APTMA) has appreciated the efforts of the commerce secretary for providing relief to the industry.
Gohar Ejaz, patron-in-chief of APTMA, in a letter to commerce secretary appreciated him, and said the industry received Rs27 billion refunds pending since 2009 and an additional Rs100 billion refunds were under disbursement, besides other relief measures.