KARACHI: Cotton prices in the country to face a slight depression but will remain on the higher side due to growing demand of the commodity by textile and spinning sectors.
Import of cotton is not viable as its international prices are on parity with prices in Pakistan, Pakistan Cotton Ginners Association (PCGA) senior member Rana Abdul Satta told Daily Times.
He rejected claim of importing around 1,100 tonnes of cotton, equivalent to 66,000 cotton bales as impossible.
Import by leading importers was being made to meet shortfall of around 2.1 million bales outgoing crop season, as government’s target was 13.23 million bales.
Instead of achieving target for crop season 2017-18, there was a shortfall of around 2.1 million bales, he added.
He said that prices and the arrival of crop would become steady by the end of September, as there would be an influx of around 45,000 bales on each working day.
He was of the view that ginners would not be affected as lint import was being made on technical grounds besides there were no sufficient cotton stocks with any ginnery.
There should be a scientific mechanism to make a correct assessment of the cotton crop size as wrong assessment may have an adverse impact on interests of stakeholders particularly ginners and growers.
A senior trader, Ghulam Rabbani said that size of import as claimed by importers was not possible as international cotton prices were hovering around 84.50 to 84.80 cents per pound, while country’s lint prices are in the range of Rs 6,000 per maund and Rs 7,150 per maund (72 to 80 cents per pound).
“Due to a quality drop, the leading textile made sector are importing cotton on price parity with Pakistani cotton, it is not possible to import 60,000 bales by them”, he maintained.
Usually, the textile sector needs to import lint in every cotton season to meet shortfall.
Within the next 4 weeks, market would experience new lint price that would be around Rs 6,950 to Rs 7,150 per maund.
Lint prices appreciated by around 300 points to 18 cents per pound in the international market and the arrival of Indian, USA and other leading cotton growing nations would be in international market within next 4 months.
Rabbani said that lint price would become stable after steadiness in the supply line and better influx of seeds into the ginneries.
He observed that recent lint prices are the outcome of excess demand of the commodity in the local market.
China is the top consumer of global cotton with 52.14 million bales, India with 21.24 million bales, Pakistan with 13.75 million bales and USA 5.10 million bales.
Users looking for quality stuff are buying in every rate continually to cover their blending requirements. The lower Sindh areas are facing more depression and rates stands at lower level of Rs. 5,950 while middle Sindh areas are still stand on Rs 5,975. The seed cotton rates are also steady by Rs. 2,900 to Rs. 3200 per 40 kilogrammes.
Ready off take getting momentum with higher supplies in both Sindh and Punjab. About 42 ginneries are already operational with full swing in Punjab while in Sindh about 35 factories are operating and producing about 27,000 bales every day altogether.
The KCA spot rate remained firm at Rs 7,500 per maund.
The New York May Futures 2018 and July Futures 2018 were in positive mood as stand 84.45 cents per pound and 84.60 cents per pound respectively. During Tuesday trading around 900 bales of all qualities changed hands between Rs 6,000 per maund to Rs 7,850 per maund.
Published in Daily Times, April 25th 2018.