KARACHI: Official spot rate halted further increase on the cotton market on Wednesday, dealers said.
The rate of cotton in the local market on Wednesday decreased by Rs 300 to Rs 400 per maund. Cotton Analyst Naseem Usman told Business Recorder that under the influence of international market local market remained bearish. Trading volume was a little bit low.
The rate of cotton in Sindh is in between Rs 13800 to Rs 13900 per maund and the rate of cotton in Punjab is in between Rs 13900 to Rs 14000 per maund.
The rate of the new crop of Phutti in Sindh was in between Rs 5700 to Rs 6100 per 40 kg. The rate of Phutti in Punjab is in between Rs 5700 to Rs 6000 per 40 kg. The rate of Banola in Sindh is in between Rs 1700 to Rs 1750 per maund. The rate of Banola in Punjab is in between Rs 1700 to Rs 1800 per maund. The rate of cotton in Balochistan is Rs 13800 per maund. The rate of Phutti in Balochistan is Rs 6200- 6800 per maund.
Nearly, 1800 bales of Saleh Pat were sold at Rs 14250 to Rs 14365 per maund, 2000 bales of Khair Pur were sold at Rs 14150 to Rs 14200 per maund, 1800 bales of Nawab Shah were sold at Rs 14000 to RS 14100 per maund, 1600 bales of Tando Adam, 1200 bales of Shahdad Pur were sold at Rs 13800 to Rs 14000 per maund, 2000 bales of Sanghar were sold at RS 13800 to Rs 13950 per maund, 1000 bales of Mir Pur Khas were sold at Rs 13800 to Rs 13900 per maund, 600 bales of Kotri were sold at Rs 13850 to Rs 13900 per maund, 800 bales of Hyderabad were sold at Rs 13800 to Rs 13900 per maund, 1200 bales of Khanewal were sold at Rs 14400 to RS 14500 per maund, 2800 bales of Haroonabad, 800 bales of Chichawatni were sold at Rs 14400 to Rs 14450 per maund, 400 bales of Lodhran were sold at Rs 14300 to Rs 14450 per maund, 200 bales of Vehari were sold at Rs 14450 per maund, 800 bales of Fort Abbas were sold at Rs 14350 to Rs 14400 per maund, 400 bales of Rahim Yar Khan, 800 bales of Rajan Pur, 200 bales of Dharan Wala were sold at Rs 14400 per maund, 800 bales of Hasil Pur were sold at RS 14350 per maund, 600 bales of Layyah were sold at Rs 14300 to Rs 14350 per maund, 200 bales of Pak Pattan and 400 bales of Dera Ghazi Khan were sold at Rs 14300 per maund.
Cotton prices are continuously hovering around all-time highs as after Balochistan last week, silver fibre hit Rs14,500/maund in Punjab also on Tuesday as weak rupee and wobbly supply weighed, analysts said.
This is the highest rate Punjab has ever seen in the history of the country. Prices touched this level in 2010-11. On the other hand, cotton prices in Sindh also shot up to the province’s all-time high rate of Rs14,400/maund.
Spot rate committee of the Karachi Cotton Association increased the official rate to Rs14,200 for a maund and Rs15,218 for 40kg. The rates increased to Rs14,380/maund and Rs15,411/40kg respectively after an addition of Rs180 and Rs193 upcountry expenses.
Sources said due to an increase in the cotton prices and electricity rates, cotton yarn prices were also trading at the highest rates in Faisalabad, affecting the power looms sector.
Naseem Usman, a leading cotton broker and market analyst, told the local news paper that the cotton rates had reached the all-time high to Rs14,500/maund in 2010-11 as a result to China’s binge-buying from the major cotton-producing countries around the world. The US prices were also pushed to an all-time high of over $2 per pound, Usman said.
This time, the major reason of an increase in the prices is depreciation of rupee. In 2010-11, dollar was at Rs85-86, now it is at Rs165. However, cotton crop in the country was also at the lowest level of 5.6 million bales in 2020-21.
Seed-cotton rates have already reached at the all time high level. It is being traded at Rs5,800/40kg to Rs6,300/40kg in Sindh and up to Rs6,400/40kg in Punjab. Rates of Balochistan seed-cotton, which is of high quality, reached Rs7,200/40kg.
Last year, cotton was sold around Rs 8,500/maund and seed-cotton fetched a price of Rs4,500/40kg. Thus prices have almost doubled this year.
Due to an increase in the rates, export shipments are also late but mills have been buying at higher prices because of their commitments with international buyers, traders said. Now, yarn profit is down; however, some mills are facing financial crisis, traders said.
The imported cotton has also become costly because of depreciation in the currency, while traders expect the cotton rates may further increase.
ICE cotton futures fell on Tuesday, as Hurricane Ida is expected to have had minimal impact on the crop despite bringing heavy rain to key growing regions.
Cotton contracts for December fell 1.42 cents, or 1.5%, to 92.81 cents per lb, by 13:28 p.m. EDT (17:28 GMT). * The December contract has gained about 3.9% so far in August, gaining for the third straight month.
The Spot Rate remained unchanged at Rs 14200 per maund. The Polyester Fiber was available at Rs 222 per kg.
Copyright Business Recorder, 2021