The prices of domestic cotton, after the arrival of fresh crop, hit the season's peak level of Rs 3,100 per maund during Friday trading, in the wake of rising prices in the world cotton market, senior traders here said.
"During the current year, the cotton production of leading cotton producing countries, including the two largest producers the US and Brazil, will not be sufficient to meet the demand of international market," they added. The expected shortfall of cotton has pushed its prices upward, as they shot up by nine cent per mound during the last one-month in the world market.
Cotton prices reached 63-68 cent per mound as compared to 54-59 cent previously available in the international market, they said. There were two major factors behind the cotton prices hike-first is its price escalation internationally and second the delay in the commodity's fresh crop arrival in the market.
As a result, the commodity prices had further gone up by Rs 70 per maund (37.24 kilograms) during Friday's trading, said leading trader Ghulam Rabbani. "After a long time, Punjab has produced fresh cotton crop earlier than Sindh province. Moreover, a ginning factory in Punjab has sold around 200 bales on the highest rate of Rs 3,100 per maund of the current season," he added.
According to him, the spot rate committee of Karachi Cotton Association (KCA) has also raised cotton prices by Rs 25 per maund to Rs 2,675 per maund last Friday.
However, an increase of Rs 50 per maund is further expected by the committee on Saturday. Harvesting and sale of major fresh crops, including cotton, wheat and onion, always start first in Sindh every year, but this is for the first time that ginning factories in Punjab have started production of cotton bales earlier than Sindh.
Rising cotton demand was also considered one of the major reasons behind increase in cotton prices in the local market, as only 20,000 bales' stock of the last season was available in the market, he said.
"World largest cotton producer, the US, has decided to reduce its cotton crop from 18.7 million bales to 10 million bales during the next five years, aimed at cutting subsidy being paid to its cotton growers," Rabbani said.
He said the US was paying billions of dollars in terms of cotton subsidy, therefore, it had reduced its cotton sowing area by over 10 percent for the current year, which would cut the actual crop size by 25 percent.
"The US cotton production during the current year is estimated at 15.71 million bales as against 21.59 million bales production of last year," he added. He said that international cotton prices would further soar in the world market, adding that such price hike would further give rise to the commodity prices in local market. He hoped that timely cotton harvesting would put a positive impact on its prices in the local arena.
Comments
Comments are closed.