Cotton prices hit season high of Rs9,300 per maund

KARACHI: Cotton prices hit the season’s highest rate of Rs9,300 per maund in the Punjab as rain-related disruptions in cotton harvest triggered price hike in the local markets, growers and ginners said on Saturday.

In Sindh, Cotton prices increased Rs300 to Rs350 per maund during the outgoing week because of a decline in supply due to heavy rains. Stakeholders said prices increased because of short supply due to rain especially in Sindh and an increase in the international market.

Rain has also affected the quality of lint in the province. Due to quality issue, mills in the province purchased lint from Punjab, where cotton prices touched the highest rate of season at Rs9,300 per maund. Stakeholders said if the situation persists the prices would further go up in the market.

Cotton prices in Sindh reached to Rs8,550 to Rs8,700 per maund, while prices moved up to Rs8,900 to Rs9,300 in Punjab and Rs8,600 to Rs8,700 in Balochistan.

Spot rate committee of Karachi Cotton Association increased spot rate by Rs300 per maund to Rs8,900 per maund.

Naseem Usman, chairman of Karachi Cotton Brokers Association said cotton sowing was not up to the mark due to substandard seeds this season while rain affected the standing crop, especially cotton belt in lower Sindh has been affected. “The largest cotton producer district of Pakistan, Sanghar, has been affected badly,” he said. Ginners and growers said rainwater affected around 20 to 22 percent of the standing crops. Punjab produces 70 percent of the cotton in the country. Though substandard seed issue remained there, crop survived in rain so far. However, production estimates will not be accumulated until monsoon is over.

Usman said spinning mills need at least 3.5 to 4 million bales to fulfill their requirements. Due to lockdown amid corona virus, some mills closed operations for weeks while others were closed for months. Thus, they kept the cotton stocks. However, they need lint now due to an increase in export orders.

“There is need to import 3 to 3.5 million bales,” he said. “Due to reports of lower crop in the country, big mills were importing larger volumes of cotton, as they were exempted from import duty.” Prices in the international market also increased. New York Cotton Futures market increased beyond 66 cents per pound and China remained the largest importer. However, due to US-China tension, prices in New York Cotton Futures slightly dropped on Thursday. Cotton production in largest cotton producer state of the US, Texas, has also been affected while crop is also under threat in Mexico. Prices have increased in India after falling for several months, as Cotton Corporation of India intervened into the price hike. There are reports that Indian cotton is exported in the international market as well. However, cotton prices remained stable in China and Brazil.