The prices of cotton largely remained stable during the week. The trading volume showed an upward trend. International market showed a mixed trend. There was a suggestion of fixing the support price of cotton seed and purchase of cotton through Trading Cooperation of Pakistan (TCP). A liquidity crunch was witnessed in the local cotton market.
A fluctuation was seen in the prices of cotton. The textile and spinning mills showed interest in the buying of good quality cotton. Cotton ginners after waiting for the increase of prices started selling their stock. They also started selling the stock due to increasing tension between Pakistan and India while the textile and spinning mills have started buying cotton of their need. An increase in buying by textile and spinning mills was seen due to the delay in delivery of Indian cotton due to tensions on borders.
The prices of cotton remained stable in the market of Sindh and Punjab. The prices of cotton in both Sindh and Punjab remained at Rs 7000 to Rs 8850 per maund while the price of Seed cotton (Kapas /Phutti) was from Rs 2800 to Rs.3500 per 40Kgs in both Sindh and Punjab. Cotton in Balochistan is available at the rate of Rs 8000 to 8100 per maund while the rate of seed cotton is from Rs 3000 to 3500 per 40kgs. Farmers don't have cotton seed left but traders have cotton seed in very small quantity.
The Karachi Cotton Association (KAC) spot rate committee increased the spot rate price by Rs 100 per maund and closed the rate at Rs 8600 per maund. The Karachi Cotton Brokers Forum said that uncertainty was witnessed in international cotton market as there are no signs of improvement in the US-China trade conflict despite US President Donald Trump's statement regarding improvement in trade ties between the two top global economies.
A fluctuation was seen in the rates of New York Cotton and dollar due to different narratives circulating in the market relating to US and China trade ties. According to the weekly report released by United States Department of Agriculture, 85,800 bales were sold while 345,700 bales were exported. According to the report, despite cancellation of export orders of American cotton by China there were no signs of any bearish trend but the rates were increased in New York cotton market. There was no clarity seen in Chinese market either.
A bearish trend was seen in market despite delay in delivery of cotton from India due to India-Pakistan tension on borders and a decrease in the production of cotton in both India and Pakistan a bearish trend was prevalent in the market. The local cotton market witnessed some improvement in the business of cotton yarn and textile products but there is a complaint of a financial crunch in the market.
Few days ago, Prime Minister Imran Khan has showed his concern over the decrease in the cotton production. He asked the concerned departments to take measures to achieve the production target of 15 million bales of cotton in the year 2019-20. After the directions of the Prime Minister, concerned departments, particularly the National Assembly Standing Committee on National Food Security and Research minister Sahibzada Mahboob Sultan has requested Prime Minister Imran Khan to support price of Cotton Seed Rs 3500 per 40kg for the year 2019-20. He also requested the Prime Minister to ask Trading Cooperation of Pakistan to buy five million cotton bales. An announcement in this regard is expected next month.
Sahibzada Nazir Sultan said that the announcement of support price of cotton or with the introduction of Fix Indicative Price system will be helpful in increasing the production of cotton. According to experts, this act will encourage farmers and they will take interest in increasing the production of cotton. They called for immediate implementation of this act because sowing season of cotton will start in Sindh next month. It is expected that Section 144 will be imposed before the sowing of cotton in April in order to protect this crop.
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