KARACHI: Cotton prices fell by Rs400 to Rs700 per maund in local markets with textile and spinning mills reluctant to buy rain-affected commodities, traders said on Saturday.
Traders said monsoon rain in Sindh and Punjab affected the cotton prices. In Sindh, cotton prices declined Rs400 to Rs600 per maund at Rs12,600 to Rs12,800 per maund from Rs13,000 to Rs13,200 per maund. Seed-cotton prices dropped by around Rs300 to Rs400 per 40kg to Rs5,200 to Rs5,700 per 40kg. Cottonseed was sold for Rs1,700 to Rs1,800 per maund in Sindh.
Traders said ginning factories have also closed their doors for rain-affected seed cotton. Ginners were having stocks of cotton prior to rain and they were demanding higher prices. Due to such issues, some ginning mills are partially closed.
Minimum price of seed-cotton was fixed at Rs5,000 per maund. The Economic Coordination Committee of the cabinet directed the Trading Corporation of Pakistan to procure 200,000 cotton bales from the market.
Trade volume has also declined in the market. Fares of trucks have increased ahead of Eid as trucks are used in loading of animals. Traders said cotton trade will take momentum after the Eid holidays.
“Prices in the international market are increasing and there is very little chance for the local lint to witness further low prices,” said a trader. Fourth wave of Covid-19 is seen as a threat, which could attract lockdown and businesses’ closure.
Karachi Cotton Brokers Association Chairman Naseem Usman said the international market witnessed an upwards trend during the outgoing week. In the New York Cotton Market prices moved up to 88 to 90 cents per pound. The US exports were down 34 percent. However, due to depreciation in dollar value, market prices remained stable and new reports of the US and China trade tussle did not affect cotton prices.
Cotton prices in China, Brazil, Central Asia and Africa increased during the week. Prices surged in India, as it had entered into a deal to export one million bales to Bangladesh while China started selling cotton from its old stocks.
Around three ginning factories started operation in Balochistan where cotton prices were recorded at Rs13,900 to Rs13,000 per maund. Spot rate committee of the Karachi Cotton Association reduced the official spot rate by Rs400 to Rs12,700 per maund.
Pakistan Cotton Brokers Association said some dealers had maligned the market practices and the association will take care of such issues.