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KARACHI: Cotton prices are stable. Improvement in cotton yarn. The business volume is relatively low. Spinners have shown increased interest in imported cotton due to high prices. According to the World Agriculture Supply and Demand Estimates (WASDE) report, there is a decline in cotton harvest and consumption decline in the United States. There is a growth trend in international cotton market.
Exports are expected to increase due to 9 cents per unit electricity tariff for industries. The outlook at Heimtextil remained positive and looking forward for expected orders.
After the increase in the price of cotton in the local cotton market last week, the price started to decrease due to the very limited purchase of cotton by the textile mills at the inch price, attributed to the external price of quality cotton compared to the current price. Cotton prices are low, leading large textile groups to show more interest in imported cotton.
Due to the higher prices demanded by ginners for the stocked cotton, the business volume in the local cotton market has also decreased, as they are now interested in resale.
The price had come down by Rs 500 to Rs 1,000 per maund, with some mills paying higher prices on a loan basis. The domestic cotton market steadied on Thursday after a positive report from the USDA led to a rise in US cotton prices.
While 277 Pakistani exporters participated in HeimTextil, a global textile exhibition in Frankfurt, Germany, some positive news has emerged from there, but a clear report is awaited.
On the other hand, the local cotton market is depleting day by day to some extent. Currently, there is little hope of a substantial reduction in cotton prices. Cotton will be sold occasionally, according to reports received from textile spinners. According to the inquiries of cotton yarn, the stock is decreasing, but the price is being reduced. The rate of cotton in Sindh and Punjab is in between Rs 18,000 to Rs 20,000 per maund.
The rate of Phutti is in between Rs 7,000 to 9,000 per 40 kg. Phutti in Sindh and Balochistan is almost over. There is an improvement in the prices of Banola, Khal and oil. The Spot Rate Committee of the Karachi Cotton Association increased the spot rate by Rs 400 per maund and closed it at Rs 19,000 per maund.
Naseem Usman, Chairman of Karachi Cotton Brokers Forum, said that there was an overall stability in international cotton prices. The price of New York cotton stood at 81.50 US cents per pound.
According to the USDA’s weekly export and sales report, sales for the year 2023-24 were 262,500 bales. China led by purchasing 121 thousand bales, while Vietnam was second with 118,900 bales. Bangladesh bought 18,000 bales, securing the third position. Pakistan purchased 11,300 bales, placing it in the fourth position.
In the year 2024-25, 22,000 bales were sold, and Turkey did not make a purchase.
After the Special Investment Facilitation Council (SIFC) approved a 9 cents per unit electricity tariff for the industrial sector, exports are expected to increase to US 20 billion dollars by the end of this year.
Caretaker Federal Minister of Trade and Production, Head of Investment, Dr Ijaz Gohar, currently on a visit to Egypt, stated that, with the restoration of a 9-cent-per-unit electricity tariff for industries, they will now be able to produce their products for the United States and the European Union. This is expected to double exports from January to December 2024. It also does not involve any subsidy.
The ongoing Heimtextil 2024 exhibition has placed Pakistani home textile products at the forefront of global interest as international buyers look keen to buy these goods.
Pakistani consulate in Frankfurt has expressed satisfaction with the enthusiastic response, anticipating significant export orders for Pakistan. Consul General of Pakistan Zahid Hussain, while highlighting the pivotal role of Heimtextil international trade fair, stated “every year, a large number of Pakistani companies and visitors participate in this exhibition. Our consulate is providing full support to ensure the event becomes economically fruitful for Pakistan.”
Hussain outlined the positive impact of the extended GSP Plus facility provided by the European Union on Pakistan’s market share in the 27-nation bloc. “Pakistani exhibitors are satisfied and excited about the response; companies are securing export orders not only from Europe but also from outside of the continent,” he said.
Despite a railway strike in Germany, Pakistani companies saw a significant influx of buyers at their stalls, which indicated the international interest and trust in Pakistani products.
The consul general encouraged exporters to focus on sustainability and environmental compliance to achieve greater success in the European market.
While welcoming the extension of the GSP Plus status, he acknowledged the collective efforts of Pakistani diplomats, commercial counsellors and the government.
“The extension of GSP Plus is encouraging and we are moving in a positive direction,” he asserted.
At the event, All Pakistan Bed Sheet Manufacturers Association’s former chairman Arif Ehsan Malik noted the challenges, stating “Pakistan faces stiff competition from India, China, Bangladesh and Vietnam due to higher costs, particularly of electricity.”
Malik stressed that for increasing Pakistan’s competitiveness, it was necessary to align electricity tariffs with rival countries.
He underlined the significance of exploring new markets, particularly in Latin America and African countries, to expand the export of home textiles, and expected export orders of $3 billion in coordination with Pakistan’s embassy at the Frankfurt fair.
Orient Textile Mills Director Sales and Marketing Wahid Tumbi pointed to the increased number of buyers and visitors, saying “this is a good opportunity for Pakistan as European buyers prioritise sustainability, which aligns with our focus on organic materials and innovative fibres.”
Tumbi disclosed that they had met non-traditional buyers including Korean customers, which indicated the broader interest in Pakistani products. Pakistan’s home textile exporters, participating in the fair, are optimistic about the prospects of increase in shipments and market expansion in the wake of positive response from the global community.
Meanwhile, according to WASDE’s Monthly Report, cotton production and consumption will decrease in the United States.
Copyright Business Recorder, 2024
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