KARACHI: Cotton buying in local market increased 159 percent by mid September, raising hopes of a harvest of around 9.0 million bales this season, traders said.According to the fortnightly cotton...
KARACHI: Cotton buying in local market increased 159 percent by mid September, raising hopes of a harvest of around 9.0 million bales this season, traders said.
According to the fortnightly cotton arrival report of the Pakistan Cotton Ginners Association (PCGA) Saturday, cotton arrivals were recorded at 2.68 million bales, higher by 1.65 million bales against last year’s 1.035 million bales.
Out of arrivals, only 1,000 bales were exported against 10,800 bales of the previous year. Around 2.35 million bales were sold to the mills, higher by 1.52 million bales, compared with 0.82 million bales of the last year.
Fortnightly flow remained at 895,412 bales, down by 139,782 bales to last year’s fortnightly arrivals of 1.03 million bales.
During this period, cotton production in Sindh was recorded at 1.72 million bales, up over one million bales compared with 0.7 million last year. Cotton production in Punjab came at 0.96 million bales, up 0.62 million, compared with 0.33 million bales of the last year.
On the other hand, prices in the local market remained stable during the outgoing week, as mills remained cautious while buying in the oversold market.
Stable prices in the local market are a reason for an increase in the value of the US dollar against rupee, as import of cotton becomes expensive compared with the local lint and as a result import orders decreased. However, traders said import orders for 3.0 million bales had been finalised.
“The local mills have to import at least 6.5 million bales, as consumption demand is around 16 million bales while cotton production, according to the government estimates, would be around 8.5 million bales,” They said.
However, independent analysts said if weather conditions remained favourable with no more rains and proper sprays were adopted over pests, the production could reach 9.5 million bales.
Cotton prices in Sindh stood between Rs12,200 per maund to Rs13,400 per maund, seed-cotton was sold at Rs4,500 to Rs5,800 per 40-kg and cottonseed fetched Rs1,650 to Rs1,750 per maund. Lint price in Punjab was recorded at Rs13,200 to Rs13,500 per maund, seed-cotton at Rs5,000 to Rs5,800 per 40-kg and cottonseed was sold at Rs1,650 to Rs1,800 per maund. Balochistan recorded lint rate came at Rs13,100 to Rs13,200 per maund, seed-cotton at Rs6,000 to Rs6,900 per 40-kg and cottonseed at Rs1,700 to Rs1,800 per maund.
Spot rate committee of the Karachi Cotton Association increased the spot rate by Rs150 to Rs13,250 per maund.
Chairman Karachi Cotton Brokers Forum, Naseem Usman, said cotton prices remained mixed in the international market during the outgoing week. Due to an appreciation in the dollar, cotton prices in the New York Cotton Market dropped by 2 cents per pound.
According to the USDA weekly cotton report, cotton export of the US decreased 37 percent during the week while shipment surged 53 percent. China and Pakistan remained the first and second-largest buyers during the week.
Prices remained mixed in China, Brazil, Central Asia, Africa, and Argentina, while they decreased in India because of the arrival of the new crop.
This year, Pakistan has set support price of cotton at Rs5,000 per 40-kg; however, after recent rains affected the quality, prices fell to Rs4,500 to Rs5,000 per 40-kg, whereas good quality seed-cotton is still fetching Rs5,600 to Rs5,800 per 40-kg.