June cotton arrivals hit record; prices stable

KARACHI: Cotton arrivals reached around 100,000 bales in June with the start of new season, bringing prices back to stable mode, sources said on Saturday.

Trade volume increased in the local market during the outgoing week, as spinners took interest in the buying, while prices in the local as well as international market remained stable, traders said.

With start of the new cotton season, Karachi Cotton Association’s spot rate committee started recording new rates and issuing new spot rate, which was increased by Rs300 to Rs12,900 per maund.

Cotton prices in Sindh were between Rs12,800 and Rs13,000 per maund, while seed-cotton rates varied between Rs5,600 to Rs6,000 per 40-kg. Cotton rates in the Punjab were between Rs13,500

and Rs13,600 per maund, while seed-cotton was sold at Rs5,600 to Rs6,400 per 40-kg.

Representatives of Naseem Usman and Sons visited cotton growing areas of Sindh during the week and said in a report that crop was satisfactory. Sowing and ginning, both were satisfactory. However, height of cotton plants in some areas was short. If timely rain arrives, crop would sustain and plants would become strong.

Water shortage still persists in Sindh while around 40 ginning factories have started their operations. Most of the Punjab factories are also consuming Sindh’s cotton. Partial arrivals have also started in Punjab. So far, traders said, cotton quality was fine.

There are various assumptions regarding cotton cultivation target. Federal Committee of Agriculture set cotton sowing target of 1.7 million acres in Sindh and 4 million acres in Punjab.

Industry sources said cotton was sown over around 1.4 million acres in Sindh and 3.4 million acres in Punjab.

FCA has set a target of 10.5 million bales in the country while people in the cotton sector say if weather remains favourable, a production of 8.0 million bales could be achieved.

On the other hand, instead of giving incentives to the sector to increase production, sales tax has been increased, which has grieved all stakeholders of the cotton and textile sector.

There was 10 percent sales tax on cotton, which has been increased to 17 percent.

PCGA Chairman Jessu Mal and other office bearers have opposed such imposition of tax and have warned to close the ginning factories in protest.

Karachi Cotton Brokers Association Chairman Naseem Usman told The News that mixed trend remained in the international market during the outgoing week. New York Cotton Market closed with 87 cents per pound. US’s cotton export remained down by 37 percent during the week.

Demand of cotton has increased in the world with several businesses opened after relaxation in Covid-19 lockdown. Prices in Brazil and Central Asia remained stable while there was an increase in India after some fluctuation.