Benazir's death may adversely affect cotton market

On December 15, arrivals of seed-cotton were reported at 8.359 million local weight bales, which were 1.878 million bales (18.345 percent) short from corresponding period of last year.
Last year, another 2.2 million bales had arrived to finally reach 12.4 million bales but, this season, hardly 1.5 million bales seed-cotton is expected, to finally finish crop at around 9.8 million bales.
It is worth mentioning that this season, the average weight of a bales has been found around 155 kg. Hence, actual crop would stand at around 8.935 million bales of 170 kg against the initial target of 14.14 million bales of 170 kg this season. It would mean that the real shortfall would come to 5.205 million 170 kg bales, equal to 36.81 percent. Against this, India expects an increase of 10 percent in its current cotton crop to reach finally around 30+ million 170 kg bales.
Thus, this year's crop, of around 9.0 million bales of 170 kg would be the lowest in the past 8 years. It is highly unfortunate that the assassination of Benazir has not only shocked the people of Pakistan but has also rocked its economy.
In the last three days, the country has suffered loss of billions of rupees in the form of damage, looting, burning of about 175 branches of banks, more than 70 railway wagons, railway lines, thousands of vehicles, dozens of petrol pumps, several factories, government offices, installations, hundreds of private shops and other government and private properties.
From the time of her tragic death, whole of Pakistan has come to standstill position, The loss of reputation, credibility, political, trading and other relations is beside financial losses. After three days' closure, how different market will take on the situation, nobody knows.
The effect of Benazir's death would be felt in all sectors for a long time. On Thursday, local cotton prices were reported steady to firm around Rs 3,100/maund (37.324 kg) for Sindh style lint cotton and Rs 3,200 for Punjab style cotton.
Since then cotton market activities have been suspended and are likely to restart from Monday, December 31. Lint cotton prices may be under selling pressure as yarn and textile goods prices are weak and spinning mills may not resume full operation for many days. As such, buying interest would be subdued, and so the lint cotton prices.