Cotton price hits the season-highest of Rs10,200 per maund

KARACHI: Cotton spot rate has reached to this season’s high of Rs10,200 per maund, taking cue from uptick in international prices, while laggard production estimate kept panic buying up, industry people said on Saturday.

Karachi Cotton Association’s spot rate committee increased the spot rate by Rs250 per maund to the highest spot rate of Rs10,200 per maund.

Price hike was also recorded in the international market, said Naseem Usman, chairman of Karachi Cotton Brokers Association. New York Cotton Market’s futures increased to 78 cents per pound, which is highest rate of the season.

US exports remained lower by 30 percent during the week. Dollar rate also decreased during the week. Cotton rates, however, increased despite of 25 December holiday, bank closing and threats of Covid-19, said Usman.

Traders said quality lint is short in supply but due to a decline in the quantity mills kept purchasing, which resulted in an increase in the prices by Rs200 to Rs400 per maund. Rates in the international market also increased, which affected the local market.

Cotton prices in Sindh remained at Rs9,200 per maund to Rs10,400 per maund. Lint rates in Punjab were recorded at Rs9,800 to Rs10,600 per maund. As usual, very little quantity of lint was in Balochistan whose price remained between Rs9,300 to Rs9,700 per maund.

Last year germination remained around 40 to 50 percent in cotton seed, which resulted in a record decline of cotton production, which has so far reached hardly 5.8 million bales due to substandard seeds. If the same substandard seeds are sown this season, there would be further decline in the production.

Buyers remained active in purchasing while ginners were also interested in the trade, as they received good prices.

There has been an increase in the demand of polyester fibre and its prices have also been increased.

Prices kept increasing in Brazil, Central Asia and Argentina while there was more increase in cotton rates in India. According to Cotton Association of India, Indian government is supporting growers and ginners in the country.

“Contrary to India, cotton crop has been neglected in Pakistan while there is need to look at the production of cotton crop on urgent basis,” said Usman.

Partial cotton sowing starts soon after wheat harvesting in March in lower Sindh while some ginning factories start in June. Punjab Seed Corporation has started sale of seed since December 15.

Due to substandard seeds, pest attack was higher during the season.

The government is urged to develop quality seed or import the quality seeds in the country. Besides, support price of cotton should be announced but that request was rejected by the federal government.

Sources in the cotton sector said no concrete measures have been taken by the government to increase the cotton production in the country.