KARACHI: Ginners are sitting on a pile of 0.5 million cotton bales with trading activity having come to a grinding halt for the second consecutive week as textile factories are closed amid the novel...
KARACHI: Ginners are sitting on a pile of 0.5 million cotton bales with trading activity having come to a grinding halt for the second consecutive week as textile factories are closed amid the novel coronavirus, market observers said on Saturday.
Karachi Cotton Association kept issuing official spot rate as there was no trade activity in the cotton market due to coronavirus-sparked lockdown. Spot rate stayed at Rs8,800 per maund, while cotton rates in Sindh and Punjab remained at Rs7,000 to Rs8,800 per maund. Pakistan Cotton Ginners Association did not release its fortnightly cotton arrivals report, which was due on April 3.
A large number of textile mills and ginning factories, having stocks of around 500,000 bales with no buyers, are shut down.
Industry officials said ginners are going through immense pressure as bank interests on their loans are increasing, while weight of cotton is decreasing amid no trade.
Karachi Cotton Brokers Association Chairman Naseem Usman said mixed trade activity was recorded in international trade markets. Prices kept fluctuating in the New York cotton market. Due to impacts of coronavirus and a decline in oil prices, New York cotton market fell to 48.38 cents per pound. Oil prices saw an improvement, which affected the cotton market and rates move up to 51 cents per pound.
Usman said situation is moving towards normalcy in China and trade activity is resuming over there, while prices and activity remained motionless in India.
Pakistani textile industries, accounting for 60 percent of export revenue, are suffering from cancellation of export orders from Europe and the USA. Local mills have huge inventory of finished production.
Several mills have stopped further production following supply disruption.
Meanwhile, agriculture minister of Punjab announced the start of partial sowing of cotton in the province from April 1 and farmers would be allowed to carry on sowing despite lockdown.
The provincial government said a total area of more than five million actors would come under cotton cultivation this year. It directed the field formations to take precautionary measures against coronavirus, while trying to achieve the sowing target of cotton, which is the major foreign exchange earner for the country. Field formations are providing technical knowledge to the growers. Cotton sowing in the country would continue from April 1 up to May 31. Partial sowing has already started in lower parts of Sindh for last two weeks.
Prime Minister Imran Khan constituted a committee to announce support price of cotton. However, analysts said support price should be announced before sowing to ensure that growers would be in a deciding position to grow cotton.
Any delay in announcement of support price would have negative effects over cotton production in the country, as growers might not opt for cotton sowing, analysts said.
Farmers need to sow more seeds this year in order to achieve the cotton production target as low quality cotton seeds are in circulation.