The benchmark price of American cotton dropped to 44 cents on Tuesday, which would impact negatively on Pakistan cotton, said exporters. Exporters were lucky to get 44 cents per pound from Bangladesh and Thailand in the recent weeks. Exporters said that fall in American cotton price would certainly hurt Pakistan's exports of raw cotton.
"Usually, Pakistani cotton can get 4 cents per pound less than the American cotton price, which means Pakistan could get 40 cents per pound in the near future," said an exporter.
Last year, American cotton touched as high as 84 cents per pound which escalated prices in the local market also and the ginners demanded that spinners should pay as per international prices. This was the reason that Pakistan's ginners could sell their cotton at record Rs 3800 per maund.
"This international fall in cotton prices can badly damage the price mechanism in the country, but the TCP factor has certainly put a cork in the falling trend," said a ginner.
"If the TCP factor is removed from the market, the prices might fall to record low," said an exporter.
Pakistan is expected to produce 12 million bales in this season and exporters believe there is room for export of one million bales.
However, the prevailing cotton prices in the world market are not encouraging for the exporters, especially if the international market offers cotton at 40 cents per pound, said exporters.
The world cotton prices fell because of higher production in all major cotton producing countries including USA, China, India and Pakistan.
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