In the local market during the last week overall prices of cotton remained stable. The mills were taking interest in the buying of good quality cotton. Due to the long Eid holidays, many mills were busy in Eid shopping of good quality cotton. The prices of cotton in Sindh and Punjab were between Rs 7,500 to Rs 9,000 per maund. The Spot Rate Committee of Karachi Cotton Association has increased the rate of cotton by Rs 100 per maund and closed it on at Rs 8,800 per maund.
The ginners had the stock of 3 lac tons bales while in Sindh two to three ginning factories will start after the arrival of new crop. At the moment arrival of Phutti has started from lower Sindh and which is available at the rate of Rs 3,800 to Rs 4,100 per 40 kg.
According to the information received from interior Sindh, the position of cotton crop is satisfactory while due to rains and hailstorm the cotton has sowed again in some areas of the Punjab and the position of the crop is not satisfactory up till now. The sowing will continue till June. According to the information received from Punjab, the farmers of some areas of cotton production are giving priority to the crop of rice and corn.
Chairman Karachi Cotton Brokers Forum told that exporters were upset with the new economic policy of the government. The news of taking back incentives from five zero rated industries are circulating in the market.
The government has also announced to take back the energy package from textile sector. Moreover, the government is imposing 17 percent sales tax on industries due to which industrialists were perturb and they were requesting government through advertisements in the newspapers that due to increase in the prices of energy, increased in the bank interest rate and increase in the prices of dollar the cost of production has increased and it has effected the exports badly.
The news of further increase in the prices of petroleum products and energy prices has hit the business. The imposition of new taxes will affect the exports.
Industrialists were of the view that in these circumstances it is difficult to run the industry and they are pondering over strike call. Group leader of All Pakistan Textile Mills Association Goher Ejaz said that if the government had taken back the status of zero rated our exports of 24 billion dollars will decrease by three billion dollars.
On the other hand, the industrialists were of the view that economy was handed over to the IMF people and they had sidelined federal secretary finance Younas Dhaga and Advisor to Prime Minister on Commerce, Textile and Industry Abdul Razzaq Daud because finance secretary is not agreeing with the strict conditions of IMF while Abdul Razzaq Daud is against taking back the status of zero rated from the five export-oriented sectors.
Despite all this, Advisor on Finance is not only taking back the zero rated status but also imposing 17 percent sales tax. There is a dispute between the high government officials and IMF officials which has negative impact on the economy of country. These issues were directly related to textile sector so this is also affecting cotton business. The uncertainty is increasing in the textile sector which is the biggest earner of foreign exchange. The textile sector is in crisis.
The crisis in textile sector is also affecting cotton business. Due to the strict actions of government the prices of dollar came down but people are of the view that prices of dollar will increase once again.
The prices of cotton witnessed increasing trend in international market while mixed trend was witnessed in the rate of New York Cotton Market while rate of cotton witnessed increasing trend in Indian cotton market and mixed trend was observed in Chinese cotton market. Due to long Eid holidays there will be no business during the next week.