The sluggish trend from the previous week continued during the current week in the local cotton market. Textile and Spinning Mills continued their cautious buying but increase in cotton prices could not be seen because of quality issues of rain-affected cotton. Last three days of the week witnessed a low volume of trade because of rain-affected cotton and shortage of transport as transporters were busy in shipping sacrificial animals ahead of Eidul Azha.
Ginners also offloaded Phutti in less quantity due to a forecast of rains on Friday and Saturday which caused problems for growers, while mills were also very cautious in receiving the delivery of cotton. The business was at a halt due to rain forecast and quality issue may hit the market even after Eidul Azha if rains occur as per forecast. Anyhow there is a hope of increased volume of trade after Eid holidays. There are chances of increase in the prices of cotton because of a supply-demand issue with an increase in the supply of Phutti and buying by the mills.
During the week in review, cotton prices in Sindh remained at Rs 7700-7800 per maund, Phutti 3200-3500 and cottonseed prices remained 1500-1550. In Punjab, the cotton prices were 7900-8000 per maund, Phutti 3300-3700 and cottonseed prices remained 1550-1600. Phutti in Balochistan was traded from 3500-3600 per maund.
Karachi Cotton Association's spot rate committee also brought down spot rate by Rs 550 per maund. Karachi Cotton Brokers Forum's Chairman Naseem Usman said that a mixed trend can be observed in international cotton markets especially due to the intensification of conflict between US & China. This conflict is impacting whole world especially New York Cotton Prices which also hit hard business in Pakistan where cotton prices dropped by Rs 600-700 per maund; while cotton prices in India also registered a decline. Shankar 6 quality cotton registered Rs 1500 per 365 kilograms in just one day even though it is being estimated that cotton production in India will remain short by 5.5 million bales. It is also causing problems for the textile sector of India.
While cotton in China is also witnessing lower rates because of conflict with the US while the Chinese currency is also witnessing decline as compared to US dollars. There is also news of trade deals of 60,000 bales but these might have been signed before the conflict started.
Pakistan has stopped trade with India due to Kashmir issue which may leave a positive impact on Pakistani cotton. Pakistani millers were importing cotton from India for the last many years. There was a year when mills imported around 2.8 million bales because of the quality and immediate delivery of Indian cotton. Mills importing cotton yarn and comber will be facing hardships due to a ban slapped by the government on import from India while a lobby of APTMA will be happy as it was against importing Indian cotton yarn and comber.
Cotton USA arranged a seminar in Karachi for textile millers to promote the import of cotton from America. A large number of textile mills owners participated in the seminar which was addressed by Cotton USA representative Mazhar Mirza and TATA Group's Shahid Tata. APTMA office-bearers also held a meeting with the Governor State Bank, who assured them to resolve their issues.
Though rains have affected the quality of cotton for some days overall production is being tipped as encouraging. Experts say that excessive rain may damage the crop but presently it is tipped to get 12.5 million bales of cotton.
However, ECC meeting held last Thursday once again deferred the issue of fixing the indicative price of cotton while growers were awaiting its fixation at Rs 4000 per maund. Next week will pass without any business because of the holidays of Eidul Azha.
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