KARACHI: The local cotton market on Wednesday remained sluggish. Market sources told that trading volume remained very low because textile sector is not taking interest in buying of cotton amid increasing threats of lock down during the third wave of coronavirus
Cotton Analyst Naseem Usman told Business Recorder that ICE cotton futures rose to their highest since the first week of March on Tuesday, tracking strength in grains markets. Cotton contracts for July were up 1.89 cents, or 2.1%, to 91.11 cents per lb by 12:10 EDT (1610 GMT), having hit their highest since March 2 earlier in the session.
Cotton prices got a fillip from other grains, which are in a “very, very bullish situation,” with looming inflation adding support to the natural fibre, Jon Marcus, president of Lakefront Futures and Options brokerage in Chicago, said.
“If corn is going to run, wheat is going to stay in lockstep, and that means cotton is going to come over,” Marcus added.
The US Department of Agriculture’s weekly crop progress report on Monday showed 12% of the total 2021 cotton crop was planted in the week ending April 25, just over the five-year average of 11%.
Cotton futures are trading with triple digit midday gains so far for Tuesday. Old crop futures are up 86 to 180 points, with July adding carry. May futures are in deliveries, though no deliveries were issued on First Notice Day. New crop prices are 143 to 197 points in the black led by Dec. December cotton futures are now an 82 point premium to March.
Friday sales on The Seam were 2,343 bales for an average gross price of 78.86 c/lb. USDA’s Daily Spot Quotations report showed 453 bales were sold at spot, for the 4/26 report. The Cotlook A index was back up by 275 points to 94.70 cents/lb for 4/26. The AWP for cotton is 70.49 cents/lb through Thursday. May 21 Cotton is at 88.72, up 86 points, Jul 21 Cotton is at 91.02, up 180 points and Dec 21 Cotton is at 86.92, up 197 points.
Meanwhile, India’s second wave may drag down new cotton crop planting. The second wave of coronavirus pandemic spreads in India and the major cotton producing areas are also affected. The high infection rate may directly limit the number of people engaged in cotton-related work in the future, and the expansion of the lock-down may affect the supply of materials, such as seed, pesticides, fertilizers and fuels. Under the condition, Indian cotton planting areas and progress may be dragged down this year.
Malik Talat Sohail, Convener of the Regional Standing Committee on Cotton and Textiles of the Federation of Pakistan Chamber of Commerce and Industry, (FPCCI) lauded the issuance of Kisan Card and appreciated the Prime Minister’s announcement of Rs.1000 per sack subsidy on DAP fertilizer during his maiden visit to Multan.
Talat Sohail said that the Prime Minister had disappointed us by not announcing any relief package for cotton. He said that multinational foreign exchange depended on white gold cotton which was also ignored in the Prime Minister’s Rs 300 billion agricultural package. Now, even on the occasion of the Prime Minister’s visit to Multan, there were hopes from Prime Minister Imran Khan regarding a package to increase cotton production, which were not fulfilled. Once again the policy of increasing cotton production was ignored which is a gross excess and it is beyond comprehension to ignore the crop which is essential for the development of the country, he added.
He said that Provincial Minister for Agriculture Syed Hussain Jahanian Gardezi was the only minister who mentioned the importance of cotton in the Prime Minister’s ceremony in Multan. We are deeply grateful to him. He further said that Pakistan which used to export its cotton to the world and has become one of the top cotton importing countries in the world which is causing loss of valuable foreign exchange. It is important for the government to realize that an increase in cotton production alone can reduce the country’s debt and create countless jobs at the local level. Malik Sohail once again demanded that the subsidy price of cotton be fixed at Rs 5,000 per quintal immediately so as to create an atmosphere of confidence among the cotton growers. The spot rate remained unchanged at Rs 11300 per maund. The Polyester Fiber was available at Rs 200 per Kg.
Copyright Business Recorder, 2021