KARACHI: Continuous rains affected the cotton crop due to which farmers are worried. Prices of cotton increased by Rs 300 to Rs 350 per maund and rate of cotton reached at Rs 9300 per maund which is highest in the season. The mills decreased the buying due to low quality of cotton while big textile groups increased their import.
In the local cotton market the prices of cotton increased during the last week under the influence of increasing trend in the international cotton market. Due to the rains in the cotton growers areas of the country the supply of Phutti was affected especially the crop in lower Sindhi was badly affected due to rains. Under these circumstances increasing trend was witnessed in the prices in international market.
The rate of cotton witnessed an increase of Rs 300 to Rs 350 per maund while the rate of Phutti increased by Rs 200 to Rs 300 per 40 kg. The quality of cotton was affected as well as trading volume was also decreased. Due to the low quality of cotton in Sindh the textile and spinning mills had started showing their interest in buying cotton from Punjab as a result of which the rate of cotton reached at Rs 9300 per maund which is highest in the season. Market sources claimed that if the situation remained like this then it is expected that prices of cotton may increase further for the time being.
The rate of cotton in Sindh is in between Rs 8550 to Rs 8700 per maund. The rate of Phutti in Sindh is in between Rs 3300 to Rs 4100 per 40 kg. The rate of Banola in Sindh is in between Rs 1550 to Rs 1600 per maund.
The rate of cotton in Punjab reached in between Rs 8900 to Rs 9300 per maund which is highest in the season. The rate of Phutti in Punjab is in between 3700 to Rs 4300 per 40 kg. The rate of Banola in Punjab is in between Rs 1650 to Rs 1750 per maund. The rate of cotton in Balochistan is in between Rs 8600 to Rs 8700 per maund while the rate of Phutti is in between Rs 4200 to Rs 4600 per 40 kg.
The Spot Rate Committee of the Karachi Cotton Association has increased the spot rate by Rs 300 per maund and closed it at Rs 8900 per maund.
Chairman Karachi Cotton Brokers Forum Naseem Usman told that due to the availability of low quality of cotton seeds this year sowing area was decreased. The crop was affected due to heavy rain especially the cotton crop in lower Sindh was more affected with rains. Sanghar district which is the highest cotton producer of the country was badly affected by the torrential rains. According to some ginners and farmers 20 to 22 percent cotton crop was affected in some areas of Sindh where water was not properly taken out from the fields. 70 percent of cotton was produced in Punjab but due to substandard seeds the sowing area was reduced however, according to the information received from some areas rains are beneficial but in some areas rains damaged the crops. But it is difficult to give exact estimates of the crop before the ending of the rain spell.
Naseem Usman told that there is a demand of one crore 35 lac to 40 lac bales in the country. Due to the lock down mills were closed for two to three months or they had reduced their production as a result of which they had some stock, but still they will have to import 30 lac - 35 lac bales from abroad. As a result of the news of low cotton production may textile and spinning mills were continuously importing cotton. The big textile and spinning groups were enjoying DTRE facility. Under this facility they can import tax free cotton. The government has not clarified his policy regarding duty free import of cotton. The government had given exemption on import from January to June but still government had not clarified its position regarding duty free import.
Naseem Usman told that bullish trend was witnessed in the international market. The Rate of Promise (Waday Ka Bhao) of New York Cotton has crossed 66 American cents. The reason behind is continuous import by China. Another reason is that cotton production was affected in the biggest cotton producing state Texas while production may be affected due to hurricane in Mexico.
Moreover, according to the weekly USDA report due to tension between America and China the export of cotton decreased by 16 percent while the rate of dollar increased and due to profit tacking by the buyers bearish trend was witnessed in the rate of New York Cotton.
Furthermore, bearish trend was witnessed in the rate of cotton in India since many months but few days back Cotton Corporation of India has signed agreements of selling already stock cotton to local mills and textile and spinning mills of Bangladesh due to which the rate of cotton increased per candy (356) kg instead of decreasing. The reason behind increasing prices is that local Indian textile mills were taking interest in buying.
As per information some international buyers were giving orders of textile products to India instead of China due to which Indian textile mills had increased their buying. Overall the rate of cotton remained stable in China and Brazil. Pakistani textile sector are getting export orders from abroad due to which the demand of cotton yarn is increasing however, there is a delay in payments.
Copyright Business Recorder, 2020