KARACHI: The Spot Rate Committee of the Karachi Cotton Association on Wednesday has increased the spot rate by Rs 150 per maund and closed it at Rs 9800.
The local cotton market remained bullish on Wednesday. Market sources told that due to increase in the rate of cotton the buyers were not taking interest. The rate of cotton reached at ten year high of Rs 10,200 per maund.
Cotton Analyst Naseem Usman told that that supply of Phutti is 19% less than previous year. The rate of cotton is increasing due to the non availability of quality Phutti in the market.
Naseem also said that due to the high prices ginners in Lower Sindh were closing the mills adding that instead of making cotton ginners were involved in trading of Phutti.
Naseem also said that this year Afghanistan has a record crop of cotton and the quality is also said to be very good. Cotton is being exported to Pakistan which is estimated to be around 200,000 bales. Yesterday Afghani cotton trade deals ranging from Rs 10,150 to Rs 10,200 were recorded.
Naseem said that government should allow the import of quality cotton seeds as they had allowed the import of cotton from abroad.
ICE cotton futures edged up for a third straight session on Tuesday as increasing fears regarding sizeable damage to the crop from Hurricane Delta countered pressure from a rising US dollar.
Cotton contract for December rose 0.24 cent, or 0.4%, to 68.61 cents per lb, at 1:28 pm EDT (1728 GMT). It traded within a range of 68.26 and 69.25 cents a lb.
The December contract was still hovering below its highest in nearly eight months, hit in the previous session.
Due to “last week’s hurricane, that came through the delta region, there was several inches of rainfall and that is detrimental to the crop at this stage,” said Bailey Thomen, cotton risk management associate with StoneX Group.
“We are also seeing some carryover from grains market,” Thomen said adding, the recovery in the dollar was slightly weighing on the natural fiber and would have a bigger impact leading to a downward price correction if greenback continues to rise.
The Federation of Pakistan Chambers of Commerce and Industry’s (FPCCI) businessmen panel on Sunday regretted that cotton crops yield has declined by almost 50 per cent, adding that the major cash crop that could contribute significantly in the development in the agriculture sector and economic prosperity of the country.
FPCCI Secretary General Ahmad Jawad said cotton under cultivation area and production declined significantly, as growers shifted from cotton to sugarcane and maize so its output slashed from 15 million bales to 8 million bales, said a press release issued here. He said that in totality, this had caused losses to the tune of $36 billion over the last one decade.
While production of cotton in India, Brazil, USA and other countries had increased manifold but it was on decline in Pakistan, he added.
Ahmad Jawad said that because of importing cotton from abroad, the cost of the textile sector increased by 6 percent so this sector became uncompetitive compared to other countries.
Cotton growers are deeply concerned about the declining harvest, from 14.8 million bales to 9.8 million bales, and production is expected to go down further this year, according to the Sindh Abadgar Board (SAB).
Cotton growers are suffering losses worth billions of rupees due to lack of quality seeds, pest attack and susceptibility of cotton to climate change, said the association of farmers in a statement issued after a meeting.
“This year has only added to the misery of cotton growers,” remarked Trade Development Authority of Pakistan (TDAP) member board of directors Mahmood Nawaz Shah.
Naseem further said that growers initially suffered due to poor quality seeds as the government allowed sale of seeds with 50% germination and that too at a higher price than last year, he said and highlighted that the international standard for germination was more than 90%. “Poor regulation has led to the doubling of seed quantity in crops as many growers have to plant seeds twice in the field,” said SAB member Dr Zulfiqar Yousafani.
“With all the added expenditure and complications, cotton was cultivated over more than 1.5 million acres in Sindh, which was affected by record-breaking rains followed by flooding in August that hit fields in the peak harvesting season,” he added.
Naseem told that 204 bales of Tando Adam were sold at Rs 8900, 1400 bales of Khairpur were sold at Rs 9800 to Rs 10, 000, 200 bales of Dadu were sold at Rs 9700, 1200 bales of Saleh Pat were sold at Rs 9800 to Rs 10,000, 1200 bales of Haroonabad were sold at Rs 10,000 top Rs 10,100, 400 bales of Marrot were sold at RS 10,100 to Rs 10,200, 200 bales of Lodhran were sold at Rs 10,100, 1000 bales of Yazman Mandi were sold at Rs 10,000 to Rs 10,100, 800 bales of Fort Abbas were sold at Rs 10,100 to Rs 10,200, 600 bales of Faqeerwali were sold at RS 10,100, 400 bales of Rahim Yar Khan were sold at Rs 10,000 to Rs 10,100, 600 bales of Rajanpur were sold at Rs 10,100, 400 bales of Shadan Lund were sold at Rs 9800 and 600 bales of Burewala were sold at Rs 9650.
He told that rate of cotton in Sindh was in between Rs 8800 to Rs 10,000. The rate of cotton in Punjab is in between Rs 9000 to Rs 10,500. He also told that Phutti of Sindh was sold in between Rs 4700 to Rs 5200 per 40 kg. The rate of Phutti in Punjab is in between Rs 4700 to Rs 5500 per 40 kg.
The rate of Banola in Sindh was in between Rs 1700 to Rs 1800 while the price of Banola in Punjab was in between Rs 2000 to Rs 2200. The rate of cotton in Balochistan is in between Rs 9200 to Rs 9300 while the rate of Phutti is in between Rs 5000 to Rs 5600.
The Spot Rate Committee of the Karachi Cotton Association increased the spot rate by Rs 150 per maund and closed it at Rs 9800. The polyester fiber was available at Rs 153 per kg.
Copyright Business Recorder, 2020