KARACHI: Significant decline of Rs1000 to Rs1200 per maund in the rate of cotton. The Spot Rate decreased by Rs800 per maund. Textile mills were happy. Financial crunch is there in the market. The quality of cotton was affected by rains. Import orders decreased because of increase in the rate of dollar and decline in the rate of cotton in the local market.
In the local cotton market during the last week the textile and spinning mills continued buying while ginners were busy in selling. However, suddenly due to prevailing of bearish trend in the market ginners started panic selling. Due to this bearish trend in the rate of cotton the rate of Phutti started declining.
Ginners and cotton traders also began to worry, but as the price of cotton continued to decline, textile mills started occasional buying. In this way rate of cotton witnessed a significant decline of Rs1000 to Rs1200 per maund. As it was difficult for the ginners to sell cotton on reasonable prices in bearish market so they started selling cotton on lower rates. However, the rate of cotton remained stable in international cotton market.
Experts were of the view that reasons behind bearish trend in the market was quality of cotton which was affected by rain, arrival of shipment of imported cotton which was delayed by three months, financial crunch in the market due to decline in the bank limits of textile mills and decrease in the supply of cotton yarn.
The rate of cotton in Sindh after decreasing by Rs 1200 per maund was in between Rs 12000 to Rs 13200 per maund as per quality. The rate of Phutti after decreasing by Rs 400 to Rs 500 per 40 kg was in between Rs 5000 to Rs 5600 per 40 kg. The rate of Banola is between Rs 1560 to Rs 1650 per maund.
The rate of cotton in Punjab after decreasing by Rs 1000 per maund was in between Rs 13100 to Rs 13300 per maund while the rate of Phutti was in between Rs 5200 to Rs 5700 per 40 kg. The rate of Banola was in between Rs 1650 to Rs 1750 per maund.
The rate of cotton in Balochistan was in between Rs 13100 to Rs 13200 per maund while the rate of Phutti was in between Rs 5900 to Rs 6400 per 40 kg. The rate of Banola was in between Rs 1700 to Rs 1800 per maund. The Spot Rate Committee of the Karachi Cotton Association decreased the spot rate by Rs 800 per maund and closed it at Rs 13100 per maund.
Chairman Karachi Cottom Brokers Forum Naseem Usman said that over all mixed trend was witnessed in international cotton markets. The rate of New York Cotton was in between 92.50 American cents to 94.70 American cents. Moreover, as per USDA recent export report the export of American cotton witnessed an increase as according to the expectations of the traders. The sales of American cotton in season 2021-22 was in between four Lac twenty three thousand bales which was 330% more than last week. China and Pakistan were the top buyers of the American cotton.
Decline in exports were recorded due to COVID-19 and slow down in shipping activities because American shipping terminals were affected by hurricane. It is expected that over all selling of American cotton may improve, as well as, New York Cotton may improve as a result of decrease in dollar index.
The rate of cotton remained stable in Brazil, Central Asian States and Africa. There was no fluctuation in the rate of cotton in India during the last week because of the arrival of cotton of new season. According to the USDA weekly report world cotton production after increasing 7 Lac fifty thousand bales reached 119.59 million bales while the demand of world cotton after increasing by 8 Lac ten thousand bales is at 124.14 million bales.
The trading of cotton improved after revival of world economy after COVID-19. World opening and closing stock witnessed a decrease of 4 Lac eighty thousand bales and 5 Lac fifty thousand bales, respectively. The report says that cotton production increased in America, Australia and Argentina. American cotton production increased by 4 % despite decrease in cultivation area is 18.51 million bales after increasing by 12 Lac fifty thousand bales which is more than the expectations of traders. The report says that demand of cotton increased in Pakistan, Bangladesh, Brazil and Turkey.
Moreover, spokesperson of textile products said that cotton looms started closing their operations due to significant increase in the prices of cotton the rate of cotton yarn also increased.
Many big groups had taken looms on over head reduced their production. It looks that now after decreasing the rates of cotton the rate of cotton yarn will reduce and factories of textile products will resume their operations. Moreover, the rate of dollar is continuously increasing.
Copyright Business Recorder, 2021