Lean business on cotton market

LAHORE: The local cotton market on Wednesday remained easy and the trading volume remained low. Cotton Analyst Naseem Usman told Business Recorder that traders are facing transport problems due to the Eid-ul-Azha. He also told that there is a forecast of rains in the cotton producing areas of Punjab.

The rate of cotton in Sindh is in between Rs 15,800 to Rs 16,400 per maund. The rate of cotton in Punjab is in between Rs 16700 to Rs 16800 per maund. The rate of Phutti in Sindh is in between Rs 6200 to Rs 6800 per 40 Kg. The rate of Phutti in Punjab is in between Rs 6800 to Rs 7200 per 40 Kg. The rate of Phutti in Balochistan is in between Rs 6800 to Rs 7200 per 40 Kg.

200 bales of Tando Adam were sold at Rs 16400 to Rs 16500 per maund, 200 bales of Shah Pur Chakar, 200 bales of Shahdad Pur were sold at Rs 16450 per maund, 100 bales of Mix Station on the condition of delivery after Eid was in between Rs 15800 to 16100 per maund, 700 bales of Burewala, 200 bales of Hasil Pur, 200 bales of Lodhran were sold at Rs 17000 per maund and 200 bales of Samundri were sold at Rs 16800 per maund.

India has extended deadline to import cotton without paying taxes until October 31 from the earlier cut-off date of September 30, 2022. This is expected to result in increase in imports, particularly because there is a steep fall in cotton prices in the international market. But experts and textile industry sources feel that it will be a temporary relief.

The Indian government said in a notification that it has extended the deadline by a month as the sowing of the cotton crop got delayed in some regions due to patchy monsoon rainfall. India had allowed duty free imports in April this year after local prices jumped to a record high because of a drop in the production and rally in global prices.

The textile industry in India can expect big relief from the latest government decision as global cotton prices had seen more fall compared to domestic prices. Domestic cotton prices have fallen to around 80,000-90,000 per candy of 356 kg. In comparison, ICE cotton prices had seen steep fall and ICE October 2022 contract noted at 99.89 US cents per pound on Tuesday which translates to 62,700 per candy (176 per kg). If the prices difference is maintained in further months, cotton imports are expected to rise. This will improve availability of cotton in domestic markets.

Market sentiments are already feeling pressure due to steep fall in global prices, and domestic cotton prices have also declined to some extent, but lower availability is restricting free fall. Spinning mills and weaving industry is also cautious for possibilities of further decline in prices. If duty free imports increase, domestic prices may feel more pressure.

The Spot Rate remained unchanged at Rs 16500 per maund. The Polyester Fiber was available at Rs 325 per kg.

Copyright Business Recorder, 2022