Thursday saw a quiet day in the cotton market. In fact the Karachi Cotton Association (KCA) saw it fit to reduce the ex-gin price of Grade 3 cotton by Rs 25 per maund (37.32 Kgs) and established it at Rs 2475 per maund.
Due to recent rains in the cotton belt, ginning had stopped in Sindh, but it has resumed again. Till now, nearly 7,000 to 8,000 bales (170 kgs) of new season (2006-07) has been ginned in Sindh, while about 12,000 to 15,000 bales have been ginned in the Punjab.
Till now little damage has been done in Sindh. Infestation of mealy bug has been reported from Sindh but up to now the injury level has been low. In Punjab the presence of curl leaf virus was reported from Rahimyar Khan, Bahawalpur and Jehanian. It is felt that the target of 13.8 million bales (170 kgs) on an ex-farm basis is still possible, but any further adverse weather in the cotton belt could damage the quality of the cotton and even reduce the output of the new crop (2006-07).
Weather experts have predicted cloudy weather at the end of this week which is seen by the cotton trade with suspicion. Continued humidity would invite pests and threaten the crop. If the weather does not deteriorate in the cotton belt, the ginning process will gain momentum by the end of August or in early September.
Generally speaking, the prices of cotton ranged between Rs 2460 to Rs 2475 per maund (37.32 kgs) in Sindh while it ranged from Rs 2600 to Rs 2625 per maund in the Punjab. The price of seedcotton (kapas/phutti) ranged from Rs 1100 to Rs 1150 per 40 kgs in Sindh while in the Punjab it reportedly ranged from Rs 1275 to Rs 1300 per 40 kilogrammes.
The yarn market continues to remain uninspiring. Mills in Pakistan do not appear to be in any haste to buy cotton. They have apparently booked enough cotton from foreign origins to take them comfortably into the new season (2006-07). A remarkable feature of the outgoing season (2005-06) has been the import of fairly large quantities of cotton from India, most of which are said to be of Shankar-6 variety.
Mills in Pakistan continue to complain about high mark-up rates being charged by the banks. Textile sources say that new investment in the industry is drying up. The Governor of State Bank of Pakistan Dr Shamshad Akhtar is tightening money supply because government policy results to rein in the inflation in the country.
Bids for 48,000 bales have been received buy the Trading Corporation of Pakistan (TCP) against its invitation to sell 28,000 bales of cotton from the 2004-05 crop. Highest price was bid for 2000 bales by a leading textile group at Rs 2356 per maund (37.32 kgs). The TCP will announce its cotton sales to the bidders soon.
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