Continued downward trend seen in cotton price in Pakistan market

Pakistan cotton market has been witnessing a continued downward trend in cotton prices throughout this week. Lint prices have been declining regularly and the cotton market is quite bearish. The ex-gin price as determined by the Karachi Cotton Association (KCA) lost Rs 300 per maund (37.32 Kgs) of grade III cotton.

The seed cotton (Kapas/Phutti) prices in both Sindh and Punjab reportedly ranged from Rs 3225 to Rs 3250 per 40 kilogrammes. Lint prices in Sindh reportedly ranged from Rs 6000 to RS.6050 per maund (37.32 Kgs), where as in the Punjab they are said to have ranged from Rs 6200 to Rs 6300 per maund on Thursday in local market.

Domestic cotton prices are very weak where as tremendous pressure has also apparently mounted on international prices as well as on the trading prices on the New York cotton futures (ICE). Ginners are also claiming that they are obtaining low ginning out-turn (GOT) which ranged from 12.5 to 13 against the normal GOT of 14.5 to 15.

The ginners in both Sindh and Punjab alleged that they are losing between Rs 100 to Rs 150 for each maund of cotton which they gin. For ginners in Sindh, it costs them Rs 6,150 to produce a maund (37.32 Kgs) of cotton, where as for the Punjab the ginners it costs them about Rs 6350 to produce a maund of cotton.

About 35 ginning factories are now pressing the new cotton crop (August 2014 – July 2015) in Sindh, where as nearly 20 ginning factories are said to be operative in the Punjab.

Pressure on domestic cotton prices is also being attributed to increasing seed cotton arrivals into the ginning factories. Moreover, the spinners and the textile mills are not doing well to be able to support the market. The problems of the Pakistani textile industry are multifarious and are said to be increasing day by day, particularly in the Punjab.

It has been reported that about two hundred member mills of the All Pakistan Textile Mills Association (APTMA) have intimated their decision to close down due to lack of supply of gas over 18 hours a day and lack of power for 14 hours daily.

As already the exports of yarn and cloth have suffered a reduction of 22 and 36 percent respectively. There is also a fear that sale of seed cotton by the growers will diminish and thus the growers will not be able to make their ends meet. Consequently, it is feared that millions of workers will be rendered jobless.