KARACHI: The local cotton market on Thursday remained stable and trading volume remained a little bit low.
The Spot Rate remained unchanged at Rs 12700 per maund. The Polyester Fiber was available at Rs 222 per kg.
Cotton Analyst Naseem Usman told Business Recorder that due to rains in the cotton areas of Sindh and Punjab may effect the quality of Phutti.
Federal Finance Minister Shaukat Tarin in his speech on 19th September at KCCI meeting said that the current season of cotton production in Pakistan will produce about 12 million bales.
The rate of cotton in Sindh is in between Rs 11500 to Rs 113100 per maund and the rate of cotton in Punjab is in between Rs 13200 to Rs 13300 per maund.
The rate of the new crop of Phutti in Sindh was in between Rs 4800 to Rs 5600 per 40 Kg. The rate of Phutti in Punjab is in between Rs 5400 to Rs 5800 per 40 kg. The rate of Banola in Sindh is in between Rs 1450 to Rs 1700 per maund. The rate of Banola in Punjab is in between Rs 1450 to Rs 1700 per maund. The rate of cotton in Balochistan is in between Rs 12300- 12400 per maund. The rate of Phutti in Balochistan is Rs 5900- 6400 per maund.
1600 bales of Khair Pur were sold at Rs 12600 to Rs 12800 per maund, 1000 bales of Rohri were sold at Rs 12600 to RS 12850 per maund, 1000 bales of Shahdad Pur were sold at Rs 11800 to Rs 12200 per maund, 800 bales of Saleh Pat were sold at Rs 12800 per maund, 600 bales of Kotri were sold at Rs 12000 to Rs 12200 per maund, 200 bales of Bagho Bahar were sold at Rs 13100 per maund, 400 bales of Rahim Yar Khan were sold at Rs 13000 per maund, 600 bales of Khan Pur were sold at Rs 13100 per maund, 200 bales of Mian Wali were sold at Rs 13000 per maund, 200 bales of Chichawatni were sold at Rs 12500 per maund, 600 bales of Layyah were sold at Rs 12800 per maund, 400 bales of Dera Ghazi Khan were sold at Rs 12700 to Rs 12800 per maund.
Last weekend, Pakistan Cotton Ginner’s Association (PCGA) announced fortnightly cotton arrival figures, and the numbers has delivered a shock to market players. As already reported in the press, cotton bales arrival is 160 percent higher than last year. While cynics may claim low-base effect, it is pertinent that arrivals as of mid-September are highest in at least 7 years! (PCGA fortnightly data prior to FY16 is unavailable).
Cotton-watchers will recall that historically, only 20 percent of the crop has been harvested by this time of the year, as second and third pickings in Punjab are yet to take place.
If the momentum continues, this could theoretically lead to domestic cotton output of as much as 13.4 million bales! That would be truly astonishing, as it would cancel out all previous forecasts of cotton output and import requirement during the ongoing marketing year. However, even the inter-ministerial Cotton Crop Assessment Committee (CCAC) isn’t so hopeful, while Pakistan Central Cotton Committee (PCCC) has so far placed forecast at 8.46 million bales. Has the Naya Pakistan government finally staged a turnaround in domestic cotton output?
To be fair, in August 2020 BR Research had noted that CCAC’s estimate of “8.46 million bales (of 170kg) appears unrealistic, considering that at 1.94 million hectares, area under cultivation is lowest since at least FY80”. Official forecast was (and still is) based on projected yield of 769 kg ha, last witnessed in FY15. Average yields have fallen dramatically since, clocking in at just 541 kg ha in FY21. For official target to become a reality, average yields would have to climb by at least 42 percent, a seemingly insurmountable challenge considering the crop has lost its best acres over the past decade.
Yet, PCGA’s arrival report has made impossible change into a forgone conclusion, a forecast revision rarely associated with Pakistan’s cotton crop performance. If the unbelievable output of 13.4 million bales is achieved, it would translate into an average yield of 1,180 kg ha. This would not only be the highest ever, it would also exceed country’s previous top yield of 815 kg pa by 45 percent, witnessed 10 years ago! Could it be true?
ICE cotton futures rose for a second straight session on Wednesday, helped by mill buying and a subdued dollar ahead of federal weekly export sales data.
The cotton contract for December was up 0.67 cent, or 0.74 %, at 90.70 cents per lb by 12:59 p.m. ET (1659 GMT), after hitting its lowest since Aug. 3 on Monday.
Total futures market volume fell by 35,805 to 17,827 lots. Data showed total open interest fell 8,727 to 263,976 contracts in the previous session.
Copyright Business Recorder, 2021
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