COTTON REVIEW: Rate increases by Rs 200 to Rs 300

The rate of cotton increased by Rs 200 to Rs 300. The rate of Prime Mark and Balochi cotton has reached Rs 10,000 per maund which is at highest level in nine years. The rate of good quality Phutti reached at the highest level of Rs 5000 per 40 kg. Up till now agreements for the import of 28 lac cotton bales had signed.

In the local cotton market during the last week due to the increase in buying by the textile mills the rate of cotton increased by Rs 300 per maund as well as the rate of good quality Phutti also increased and reached Rs 5000 per 40 kg. Overall all fluctuation was observed in trading volume but a little bit increased was observed in trading volume.

The rate of good quality Balochi cotton grown in Dera Ghazi Khan and Prime Cotton grown in Deherki and Ghotki reached between Rs 9900 and Rs 10,000 which is at highest level in last nine years. Before that in 2010-11 the rate of cotton reached Rs 14,000 per maund which was at highest level in history of cotton at that time there was a record increase in the prices of history of cotton in the world. Due to increase in demand of gold and cotton in China the Rate of Promise (Waday Ka Bhao) of New York cotton reached 2.19 dollars per pound which is all time high. In the same way the price of gold was all time high.

In Sindh the rate of cotton as per quality was in between Rs 7800 to Rs 9750 per maund while the good quality cotton was available at Rs 10,000 per maund. The rate of Phutti was remained in between Rs 3600 to Rs 4700 per 40 kg.

In Punjab the rate of cotton remained in between Rs 9000 to Rs 9750 while the good quality cotton was sold at Rs 10,000 per maund while the rate of Phutti remained in between Rs 3800 to Rs 4800. In Balochistan the rate of cotton is in between Rs 8800 to Rs 9500 per maund while the rate of Phutti was in between Rs 4200 to Rs 5000.

The Spot Rate Committee of Karachi Cotton Association has increased the rate of cotton by Rs 200 per maund and closed it at Rs 9400 per maund. In the same way upward trend was seen in the prices of Khal and Banola in the country.

Chairman Karachi Cotton Brokers Forum Naseem Usman told that due to untimely rains and extreme hot weather the production of cotton was effected. Moreover, standing cotton crop was attacked by different types of insects which includes white lies and attack of Pink Boll Worm virus caused irreparable loss to the crop.

The government has set the target of production of 1 crore 50 lac bales at the start of the season but after the irreparable damage of cotton crop the Cotton Crop Assessment Committee has decreased the target by 48 lac bales and set a new target of production of one crore two lac bales. In this way cotton production will be 55 lac bales less which is 33 percent less from the initial estimate. Experts were of the view that 90 lac bales will be produced

Naseem Usman told that local textile mills need one crore 48 lac bales. In this way in order to fulfill the demands of local textile industry 50 lac bales of worth one billion 60 crore dollars will be imported which will effect the economy of Pakistan which is already in crisis.

According to the importers of cotton up till now agreements for the import of 28 lac bales from foreign countries including America, Brazil, African and Central Asian countries had been signed and the process of import of cotton is going on. It is expected that good quality cotton will be available in the country till November 15 while the textile mill owners are in a hurry to buy good quality cotton on at high rate.

Moreover, due to increase in cost of production and opening of Letter of Credits by importers there is a financial crisis in market. It is feared that it will further increase. The textile mills had to pay seventeen percent sales tax under the head of cotton and yarn while the refund takes a long time.

Naseem Usman told that over all mixed trend was witnessed in the international cotton market. The rate of New York Cotton Market was linked to weekly up and down of export.

According to the weekly USDA weekly report the export of American cotton remained 23 percent low as compared to last week. In this report Turkey and Pakistan were the main imported of American cotton while Indonesia had cancelled the import of 60,000 bales. Moreover, trade talks between China and America going to be held in Chilli for the solution of trade conflict had been postponed due to this the rate of cotton came down. While the production of cotton increased in India but the crisis in textile sector. But due to ban on trading between India and Pakistan the increasing trend in prices of cotton in India continued. For the last many years Pakistan was the biggest importer of Indian cotton. Mixed trend was seen in the prices of cotton in China. Due to heavy increase in the prices of cotton bearish trend was seen in the local textile sector.

Due to the drastic decrease in the cotton production other than All Pakistan Textile Mills Association chairman Karachi Cotton Association Khawaja Muhammad Zubair in a statement also demanded imposition of cotton emergency and lifting of import duty on cotton.