The cotton prices are projected to be strengthened. The mills are showing interest in buying because of the availability, albeit modest, of good cotton. The prices of cotton increased by Rs 100-150 because of availability of good quality cotton. The government is formulating a strategy to increase the production of cotton.
During the last week, the prices of cotton remained stable. The trading volume which shows downward trends during last so many weeks showed some upward trend. The trading of new season 2019- 20 will start in five months. The big textile groups haved signed agreements on the import of cotton in a large quality from abroad and they had started receiving delivery of cotton from abroad. The small mills had started taking interest in the market in order to fulfill their needs. There are chances of improvement in the China-USA economic ties in coming days. If the trade ties improved between China and USA then it is expected that trading volume will be increased in international market too. During the week, prices of cotton increased by Rs100- 150.
The price of cotton in the Punjab and Sindh remained at Rs7000 per maund to Rs 8950 per maund while Seed cotton (Kapas/Phutti) is available from Rs 2800 to Rs.3500 per 40 Kg in both Sindh and Punjab. Cotton in Balochistan is available at the rate of Rs 8000 to 8200 per maund while the rate of seed cotton which is available in small quantities is from Rs 3000 to 3500 per 40 kg.
The Karachi Cotton Association (KAC) spot rate committee stablized the rate at Rs 8600 per maund. The Karachi Cotton Brokers Forum said that experts were hopeful that in the next few days the prices of cotton are expected to increase because of chances of improvement of trading in international market despite the fact that in the last week low trading volume was witnessed in New York Cotton Market. The reason of low trading volume was an increase in the rate of dollar and the news of increase in the production of cotton. The price of cotton was lower than70 American cents which was lowest in one and a half years.
The prices of cotton in China and India witnessed a downward trend. The reason of low cotton prices in India is slowdown in the business of textile. The cotton production in India is low too. The prices of cotton are not increasing despite low production even the volume of export is also low as compared to last year.
According to the estimates of weekly report released by United States Department of Agriculture 300,000 bales were sold which is 31 percent more as compared to last week. Interestingly, this week also Pakistan is the biggest importer of American cotton. It is expected that sale of American cotton will increase.
The meeting of the Economic Coordination Committee held on Tuesday under the chairmanship of federal finance minister Asad Umar decided to lay focus especial on Research and Development for increasing the production of cotton. The ECC also decided to take benefits from Chinese experience and start joint collaboration with China for increasing the production of cotton.
Earlier, Prime Minister Imran Khan directed the concerned departments to take measures to achieve the production target of 15 million bales of cotton in coming season of 2019-20. It is expected that water problem will be solved to some extent in the coming season due to snowfall on hills. It is expected that growers who got reasonable price of Seed cotton (Kapas/Phutti) will take interest in increasing the production of cotton.
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