KARACHI – Despite the PM’s visit to India, the expected benefits of cricket diplomacy for the textile sector have not yet materialised. India has refused to support Pakistan’s claim to an EU-sponsored package for additional trade quotas for 75 textile products in the WTO (World Trade Organisation).
The ongoing cotton rally witnessed in the past year exceeded expectations globally, reaching a high of $2.44 per pound (Cotlook-A) and Rs 13,932 per maund (KCA), although the acceleration in prices has seemingly reduced during the last month. This rally ran on the back of devastating floods in China and Pakistan leading to destroyed cotton crops; tight demand and supply of the commodity after the floods and an exports ban policy by India.
A fall in average cotton prices for the next fiscal year must be balanced with the fact that demand in China will shore up cotton prices, said Amreen Hirani at Investfinance. Instead, cotton prices may stabilise by FY12 and yet stay higher than average prices in the last five years. Furthermore, the FBR by delaying the imposition of sales tax on local sales of textile products is expected to benefit the textile industry by allowing raw materials stuck up with customs to be released.
The world’s top producer and catalyst of the recent cotton rally, China, has informed about its next seasonal purchase on the price of $1.4 per pound. This price-lock is 77 percent higher than Cotlook-A’s average cotton price in the last five years.
