After a sizeable slump recorded in cotton prices over the previous several sessions, exporters entered the market which resulted in the increase in lint prices on Thursday by Rs 25 to Rs 50 per maund (37.32 kgs).
Prominent exporters who have been active recently include Messrs Hakimuddin Harmusji, Rehmoumer and company, Haji Khudabux Amir Umer, Dadasons, Naseem Enterprises and Meezan Enterprises.
It has been reported that enquiries and export sales into Bangladesh prompted increase in cotton prices even though the quantities involved are not very large. Despite widely held anticipation that current cotton crop (2004-2005) is shaping up extremely well and even the quality of lint is said to be very good, export enquires imparted strength to the cotton market on Thursday which revived again.
Reports of current crop (2004-2005) output continue to be couched in very optimistic terms, and if market talk is any indications, Pakistan should harvest a record output.
Furthermore, spinners are very happy with the quality of lint arriving from Sindh and are very optimistic that Punjab grades of lint are likely to improve further in a substantial way.
Therefore, when the prices started to sag in the recent past exporters entered the market and mills also want to build up their inventories as a long-term strategy.
The current cotton season (2004-2005) is moving into full swing where all sectors including the growers, the ginners, the spinners and the exporters are finding it quite remunerative.
At present, nearly 75,000 bales are being ginned daily, which figure is expected to rise to about 100,000 bales (160-170 kgs) by the beginning of next month viz. 1st of October 2004.
Most estimates of current crop (2004-2005) output in Pakistan are now hovering around the figure of 12.5 million to 13.5 million bales which traders say can be even higher and could create a new record.
The seedcotton (kapas/phutti) prices also tightened by about Rs 25 per 40 kgs on Thursday. Thus the prices of seedcotton in both Sindh and Punjab were said to have ranged from Rs 925 to Rs 975 per 40 kilograms.
The growers and the ginners are lending credence to Prime Minister Shaukat Aziz’s assertion that the Trading Corporation of Pakistan (TCP) would definitely step in if the cotton prices go below the support price indicated for the current season (2004-2005) which is RS 925 per 40 kilograms.
Some of the ready sales reported on Thursday included 300 bales of cotton from Mirpurkhas in Sindh at Rs 2075 per mound (37.32 kgs); 400 bales also sold in Mirpurkhas at Rs 2100 per maund; 1000 bales each from Sanghar and Tando Adam sold at Rs 2100/Rs 2125 per maund; 2000 bales from Shahdadpur sold at Rs 2125/Rs 2135 per maund, wh1le 2000 bales from Nawabashah were said to have been sold at Rs 2150 per maund.
Punjab cotton prices also perked up on Thursday. In Burewalla, 600 bales were sold at Rs 2125 per maund (37.32 kgs); large quantities of cotton are da1ly sold in Punjab so that almost all the cotton pressed by the ginners is taken up by the mills, therefore, the spinners are lifting nearly 70,000 to 75,000 bales daily in both Sindh and Punjab.
Sales were also reported from such stations as Rajanpur, Mian Channu, Chistian, Jehania, Bahawalpur and Bahawalnagar at prices ranging from Rs 2115 to Rs 2140 per maund. The tone of the market was described as being steady in the evening.
Mills in Pakistan are expected to use more than 1 million bales of domestic size cotton every month during the forth-coming season (2004-2005) while some traders expect it to be much higher.
The United States dollar has strengthened in recent weeks and has attained a two-year high level in the interbank market against the Pakistan rupee which would make imports dearer while encouraging exports from Pakistan.
Cost of dollar has now moved up considerably beyond Rs 59. Certain mills are also said to be desirous of settling their cotton import bookings if possible with the shipper and are also said to be prepared to pay any difference involved. Due to their commitments at various origins, the shippers may find it difficult to oblige the mills.
On Thursday the Chairman of the Karachi Cotton Association (KCA) Iqbal Umer, invited the commissioner of income tax, spec1al zone, corporate region, Karachi, Irfan Nadeem to discuss matters of mutual interest. Iqbal Umer highlighted the role of KCA in the marketing of raw cotton.
The chairman KCA extolled the competence of Irfan Nadeem and said he has been recently posted at Karachi after successfully completing the task assigned to him to increase tax revenue from the Lahore region.
Iqbal Umer pleaded with the commissioner of income tax, special zone, corporate region, Karachi for his help and assistance to the business community with special reference to the cotton traders to resolve the outstanding problems relating income tax.
On his part, Irfan Nadeem stated that the government is taking all the necessary measures to simplify the taxation system in order to provide relief to the tax payers.
Irfan Nadeem also assured the KCA that the income tax department is examining the tax refund cases on merit in order to ensure prompt payment of refund claims to the assesses.
In order to restore the confidence of the tax payer, the income tax department is accepting the version of the assesses under the self assessment scheme to provide a friendly environment between the tax payers and the tax collectors.
Regarding the government decision to induct the Trading Corporation of Pakistan (TCP) to support cotton prices for the prevailing season, the new chairman of the Pakistan Cotton Ginners Association (PCGA) Haji Ibrahim desired that the government should instruct the TCP to lift all the cotton tendered to it at the option of the ginners.
Haji Ibrahim appreciated the government decision to induct the TCP to support cotton prices if they fall below the announced price of Rs 925 per 40 kgs, but he was bitter about the past experience in this regard with the TCP.
He also pleaded with the government desiring that 85 percent of the cost of cotton should be paid through the regional offices and ginners should not have to go to Karachi so as to avoid lengthy delays for receiving their payments.
Haji Ibrahim asked the government to lift all the grades of cotton from 1 to 4 in case the mills were not forthcoming with the purchase of cotton.
Arif Saeed, a very prominent spinner belonging to the prestigious service group of industries has been elected as the next chairman of the All Pakistan Textile Mills Association (Aptma) central zone.
Curtesy: Business Recorder