Cotton market: Solo deal reported in absence of motivating factor

LAHORE: The local cotton market on Friday remained steady while the trading volume remained low.

He told that the rate of cotton in Punjab and Sindh is in between Rs 18000 to Rs 20,000 per maund. 1350 bales of cotton of Khairpur were sold at Rs 21100 per maund. He also told that 800 bales of Sadiqabad were sold at Rs 20,500 per maund.

The Federal Committee on Agriculture (FCA) on Thursday fixed the cotton production target at 11 million bales from cultivation over an area of over 3.1m hectares of land.

The committee meeting chaired by Minister for National Food Security and Research Syed Fakhr Imam set production targets for important kharif crops in 2022-23 and expressed satisfaction over the availability of inputs particularly fertilisers and irrigation water. It noted that the production of wheat during the outgoing rabi season recorded a decrease of 2.5 per cent over the last season.

The committee was informed that 65 per cent of cotton was grown in Punjab while the rest was grown in Sindh. Nearly 26pc of farmers grow cotton, and over 15pc of the total cultivated area is devoted to this crop. A negligible area comes under the cotton crop in Khyber Pakhtunkhwa and Balochistan.

The committee fixed 8.6m tonnes production target for rice from an area of 3.1m hectares. Pakistan harvested record rice production of 8.9m tonnes during the last kharif season, up from 8.4m tonnes the prior year. Fertiliser subsidy scheme has contributed to higher yields

Pakistan is the 10th largest rice producer and the country’s exports make up more than 8pc of the world’s total rice trade. The target for sugarcane, the third-largest kharif crop, was set at 78.6m tonnes over an area of 1.2m hectares for 2022-23 season. Last year, sugarcane production increased to 75.9m tonnes, which was higher than 66.8m tonnes from the previous year.

Despite an increase in sugarcane production, the country witnessed instability in the sweetener’s availability for end-users and prices. While reviewing the performance of the rabi crops for 2021-22, the committee observed that the gram production for 2021-22 has been estimated at 354.7 thousand tonnes from an area of 866.6 thousand hectares; the increase in production is 51.6pc over the last year.

The FCA was informed that the potato production for 2021-22 has been estimated at 7.74m tonnes from an area of 0.3m hectares; the increase in production is 34.8pc over the last year. The committee also discussed the production achievements of other essential crops like gram, lentil, onion and tomato.

Regarding the availability of water for the kharif season, the committee was informed that water availability in canal heads will remain 65.84 million acres’ feet (MAF) as against last year which was 65.08 MAF. Presently, all the provinces are getting satisfactory supplies in the system.

Meanwhile, ICE cotton futures fell 3% on Thursday, weighed down by a stronger dollar while some investors locked in profits after a rally in the previous session.

The first-month contract on ICE futures for May was down 4.14 cents, or 3%, at 135.70 cents per lb, by 1:49 p.m. EDT (1749 GMT). Cotton rose more than 2% on Wednesday on firm demand and supply shortfalls due to drought conditions.

“A bigger part of today’s price move is profit-taking and index roll. There is a huge willingness to sell the front two months and buy the back because of the steep inverses. You’ll see more of that going forward,” said Louis Barbera, partner and analyst at VLM Commodities Ltd.

“Going forward, on-call sales is going to be a bigger factor influencing prices as mills are having the largest short (positions) they’ve ever had this late in the year,” Barbera said.

The dollar rose 0.4%, making cotton more expensive for other currency holders.

The US Department of Agriculture’s planting intentions report showed U.S. cotton acreage at 12.234 million acres for the 2022/2023 marketing year, versus the 12.007 million acres forecast in a Reuters poll.

“Cotton just seems to be taking a retreat from the highs and the acreage numbers were no real surprise, However, the key going forward is going to be how many acres they will harvest in West Texas,” said Jim Nunn, owner of Tennessee-based cotton brokerage Nunn Cotton.

The USDA also released weekly export sales that showed net sales of 234,000 running bales of cotton for 2021/2022.EXP/COT

“Demand for U.S. cotton is still good and the exports report showed solid numbers considering the markets were in a climb last week,” Nunn added.

The Spot Rate remained unchanged at Rs 20,500 per maund. Polyester Fiber was available at Rs 288 per kg.