Bearish trend witnessed on cotton market

KARACHI: Local cotton market remained bearish on Saturday.

Trading activity remained low in the local cotton market after the rains as millers are not taking interest in the buying because of the low quality of cotton due to rains in Sindh and Punjab.

The millers started imported cotton from abroad because of the high prices of the local cotton. Picking was also affected due to rains.

Cotton Analyst Naseem Usman told that President of SITE Association of Industry Suleman Chawla has demanded the government to immediately withdraw the decision of ECC allowing K-Electric a tariff increase in the range of 1.09 to 2.80 rupees per unit.

Opposing the decision of the ECC allowing K-Electric a tariff increase, he said it is irony that instead of providing relief to Karachiites who are suffering from the coronavirus and now due to aftermaths of torrential rains, the government has put further burden on them by allowing K-Electric an increase in its tariff.

It is quite surprising as the business community was expecting a cut in power & gas tariffs to restore industrial production activities in the wake of corona pandemic, which is not in 100pc control as yet, Chawla said and added that allowing K-Electric an increase in its tariff clearly shows how much 'serious' federal government is towards resolving issues of the mega city.

Meanwhile ICE cotton futures fell to near a two-week low on Thursday after a sell-off in equities soured market sentiment and stoked concerns about demand for the natural fiber.

Cotton contracts for December settled down 0.68 cent, or 1.1%, at 64.28 cents per lb, having earlier fallen to their lowest since Aug. 21 at 64.13 cents per lb.

On Wednesday, prices settled lower after investors booked profits following gains in the previous session.

Naseem also told that as per media reports Sindh farmers have lost nearly half-a-million bales of cotton ever since the monsoon season began and pest attacks intensified following the humid weather.

"Growers in Mirpurkhas, Sanghar, Umerkot, Khipro etc have lost nearly 400,000-500,000 bales of cotton in the ongoing month, and whatever crop has survived the downpour is of low quality and will sell at below market rates," said Pakistan Cotton Ginners Association's former chairman Dr Jessu Mal Leemani.

"Rains have caused enormous losses to farmers in these districts as there is no concept of crop insurance and the government has yet not announced any financial help for them," he deplored.

Naseem Usman told that 200 bales of Shahdadpur were sold at Rs 8500.

He also told that rate of cotton in Sindh was in between Rs 8500 to Rs 8600.The rate of cotton in Punjab is in between Rs 8900 to Rs 9100. He also told that Phutti of Sindh was sold in between Rs 3700 to Rs 4000 per 40 kg. The rate of Phutti in Punjab is in between Rs 3600 to Rs 4300 per 40 kg.

The rate of Banola in Sindh was in between Rs 1600 to Rs 1650 while the price of Banola in Punjab was in between Rs 1700 to Rs 1800.

The Spot Rate remained unchanged at Rs 8900 per maund.

The polyester fiber was available at Rs 153 per kg.

Copyright Business Recorder, 2020