Cotton prices fall Rs2,500/maund in line with world markets

KARACHI: Local cotton prices dropped by Rs2,500 per maund (37.324 kg) during the second half of the outgoing week, mostly owing to a low-demand led decrease in the international prices of the silver fibre, traders said, which also brought the spot rate down by Rs1,700 per maund.

After the volatility in the local cotton market over the past week, the cotton prices are taking cues from the abnormal fall in international cotton markets. With the dollar losing its value dramatically in the international market, the New York Cotton's December futures’ rates fell to 98 cents per pound. It curtailed the local cotton yarn demand triggering panic selling by ginners, which resulted in a decline of Rs2,500 to Rs18,500 -19,000 per maund in the prices of cotton.

The price of the seed-cotton has also decreased Rs1,000-1,200 per 40kg to Rs8,200-8,600. “The pressure is mounting on the market,” traders said.

In Sindh, the cost of cotton was recorded at Rs18,500-19,000 per maund. Due to the rains in the Punjab province, a few cotton factories are operating; however, the cost of cotton there stood at Rs19,000-19,500 per maund and that of seed cotton clocked in at Rs7,000-8,200 per 40 kg. In Balochistan, the rate of cotton was around Rs18,500-19,000 per maund.

Karachi Cotton Association's spot rate committee reduced the official spot rate by Rs1,700 per maund to Rs18,800 per maund.

Naseem Usman, Chairman Karachi Cotton Brokers Forum, said the decline in textile products due to the recession in international markets had reduced the volume of business.

“Due to which the demand for local textile products exporters has also decreased. Some importers have lost interest in their earlier agreements,” Usman said.

According to the USDA Weekly Export and Sales Report, 16,200 bales were sold for 2021-22, a decrease of 39 percent over the previous week. Vietnam topped the list with 6,300 bales.

On the other hand, Punjab is likely to miss cotton sowing target for the year 2022-23 by around 340,000 acres.

As per the sowing position survey of cotton area 2022-23, the area under cultivation was 3.583 million acres against the target of 4 million acres, while the provincial agriculture department is hoping the area under cotton sowing will be 3.645 million acres by June 30, 2022.

Pakistan's textile and textile exports increased by 28.26 percent to $17.62 billion in the first 11 months of this fiscal due to the sharp decline in the value of rupee and rising global demand.