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KARACHI: The Spot Rate Committee of the Karachi Cotton Association on Tuesday has decreased the spot rate by Rs 50 per maund and closed it at Rs 9250 per maund.

The local market remained bearish on Tuesday. Market sources told that mills were involved in cautious buying due to which the trading volume remained low. The rate of Indian cotton was increased by Rs 400.

Cotton Analyst Naseem Usman told that according to the data released by USDA till November which shows that there is no chance of bullish trend in the market in near future.

Cotton futures rose 2% on Monday as Moderna Inc became the second drugmaker to announce positive data for a Covid-19 vaccine, boosting investors’ sentiment on expectations of a strong rebound in demand for the natural fiber.

The cotton contract for March rose 1.47 cents, or 2.1%, to 71.87 cents per lb by 12:17 p.m. EST (1717 GMT).

“The dollar is down a little bit and this is one of those days when all the markets are up; there is a lot of optimism regarding the new vaccine and that next year is going to be good for commodity consumption,” said Rogers Varner, president of Varner Brokerage in Cleveland.

Based on interim data from a late-stage trial, Moderna said its experimental vaccine is 94.5% effective in preventing Covid-19.

Naseem also told that spinning industry may have to fulfil close to half of its cotton requirement through imports during the ongoing season, as domestic production may struggle to exceed 6 million bales. Damage due to extreme weather only partly explains the low output, which is primarily attributable to the crop falling out of favour with growers, a storm that has long been in the brewing.

Moreover, Pakistan is slated to record its slowest season of cotton production in 35 years, with ginneries struggling to achieve output of 6.5 million bales (of 170kg). It appears intuitive that the impact of poor crop performance on textile exports will be determined on pricing of imported cotton. But what exactly is the volume of Pakistan’s cotton demand?

Cotton bales are processed into yarn by the spinning industry. Ergo, either a shortfall in domestic production should be fulfilled by increase in imports or lead to fall in yarn production. The latter has certainly not happened (barring Covid-19 related decline in FY20). Between FY10 – FY19, domestic yarn production increased by one-fourth, an increase that is corroborated by various private and public sector sources, including APTMA, PBS, PCCC and MoIP.

Naseem told that 2600 bales of Khairpur were sold at Rs 8500 to Rs 8600 per maund, 200 bales of Saleh Pat were sold at Rs 8950 per maund, 1400 bales of Fort Abbas were sold at Rs 9350 to Rs 9400 per maund, 400 bales of Sadiqabad, 400 bales of Rahim Yar Khan, 1200 bales of Haroonabad, 200 bales of Liaquatpur, 200 bales of Shehar Sultan were sold at Rs 9350 per maund, 800 bales of Faqeerwali were sold at Rs 9300 per maund, 600 bales of Alipur were sold at Rs 9275 per maund, 200 bales of Shujaabad and 200 bales of Khanewal were sold at Rs 8700 per maund.

He told that rate of cotton in Sindh was in between Rs 8400 to Rs 9200 per maund. The rate of cotton in Punjab is in between Rs 8800 to Rs 9400. He also told that Phutti of Sindh was sold in between Rs 3300 to Rs 4200 per 40 Kg. The rate of Phutti in Punjab is in between Rs 3700 to Rs 4600 per 40 Kg.

The rate of Banola in Sindh was in between Rs 1600 to Rs 1750 while the price of Banola in Punjab was in between Rs 1500 to Rs 2200. The rate of cotton in Balochistan is in between Rs 9000 to Rs 9100 while the rate of Phutti is in between Rs 4000 to Rs 5000.

The Spot Rate Committee of the Karachi Cotton Association on Tuesday has decreased the spot rate by Rs 50 per maund and closed it at Rs 9250 per maund. The Polyester Fiber was available at Rs 158 per Kg.

Copyright Business Recorder, 2020