Cotton prices shoot up due to rains, weaker rupee against dollar

MULTAN: Cotton prices have gone up by Rs1,100 per 40kg in three days due to the rains in Sindh and Punjab. The rains have damaged 5 to 7 percent of cotton crop as thousands of acres of land were flooded due to rain.

According to the Pakistan Cotton Ginners Association (PCGA) sources said that prices have risen due to disruption in the arrival of cotton in the market and large scale damage to cotton crop caused by rains.

They said that the cotton prices were likely to increase further with the increase in demand of ginning factories and textile mills.

For the last three days, an increase of Rs500, Rs300 and Rs300, respectively, was recorded per 40kg prices of cotton.

With the recent surge in cotton prices, per 40kg prices of cotton in Sindh and Punjab reached Rs.6,900 and Rs7,100, respectively.

On the other hand, 200 ginning factories have reportedly stopped functioning in Sindh due to unavailability and increase in price of raw material.

Sources said that growers were expecting 15 million bales of cotton but recent rains affected two million bales on thousands of acres of land, due to which the set target could not be achieved and cotton prices could cross a record level.

Sources said that another reason behind the surge in cotton prices in Pakistan was the weakening condition of rupee against the dollar.

Copyright PPI (Pakistan Press International), 2011