KARACHI: Cotton hit an historic high of Rs16,000/maund (37.3kg) in week, owing to high demand as rupee devaluation versus dollar caused the imports to become costlier, forcing mills to buy from local market, traders said.
Although the supply of seed-cotton and lint remained normal during the week, prices rose.
Cotton price in Sindh reached all-time high of Rs16,000. In Punjab, seed-cotton rates hit the highest price of the season with Rs7,700/40kg.
Top-quality seed-cotton in Balochistan was traded at Rs8,000/40kg, the highest in the history.
Besides, the cotton spot rate also increased to a life-high of Rs15,400/maund.
“Cotton price of Rs16,000/maund, seed-cotton rate of Rs8,000/40kg and the spot rate at Rs15,400/maund are the highest in Pakistan. They have never before reached that point in the history,” said Naseem Usman, chairman of Karachi Cotton Brokers, talking to The News.
During the week, an unusual fluctuation was witnessed in the cotton rates. Due to an increase in the cotton prices, several mills have become financially unstable and were compelled to purchase lint on credit from the market.
Sources in the industry said a big jump in the dollar rates increased the price of imported lint, while the delivery of cotton yarn and textile products was affected because of an increase in the shipment prices.
Though such issues had somewhat calmed down, the mills had to buy local cotton at the highest rates.
Cotton in Sindh traded at Rs12,000-16,000/maund, seed-cotton at Rs4,500-6,600/40kg, while it hovered at Rs14,000-15,800/maund in Punjab, where seed-cotton fetched Rs5,800-7,700/40kg.
Cotton prices reached Rs14,000-Rs15,800/maund in Balochistan that witnessed seed-cotton rates at the highest level of Rs6,000-8,00040kg.
Rates in the New York Cotton Market remained stable during the start of the week, but increased to 114 cents/pound later in the week despite a decline in the weekly exports, as per data of the US Department of Agriculture.
China remained the biggest buyer of US cotton during the week with 186,700 bales, followed by Turkey with 149,200 bales. Pakistan purchased only 12,600 bales during this week.
Cotton prices also remained higher in Brazil, Africa, and China. Besides, prices in India also increased and reached a historical high.
Sources said the textile processing and value-added industry was facing its worst crisis ever. “An increase in the prices of raw materials and a shortfall in the supply have affected the revenue of this industry.”
The prices of coal and petroleum products, a shortfall in the supply of gas, and rupee devaluation badly affected this industry, sources said.
