Cotton market witness some active buying

Renewed buying interest from needy spinners witnessed trading activity resuming slightly at the cotton market on Tuesday. However, overall sentiment remained weak and outlook uncertain. Negative growth in Punjab cotton production disturbed the market and will affect total cotton production. The last phutti arrival figures showed improvement due to higher cotton production in Sindh.

Lower cotton prices impacted phutti (seed cotton) prices which are being quoted at lesser rates for both Sindh and Punjab varieties. Phutti prices declined to Rs2,700 to Rs3,200 per 40kg for Sindh and Rs2,700 to Rs3,300 per 40kg for Punjab.

At the Karachi Cotton Association (KCA) spot rates were unchanged at overnight level. While, trading improved at the Karachi Cotton Exchange on Tuesday, spot rates remained firm at Rs6,600/maund (37.324kg) and Rs7,073/40kg. Ex-Karachi rates also remained firm at Rs6,745/maund and Rs7,228/40kg after an addition of Rs145 and Rs155 as upcountry expenses, respectively.

A total of 14 transactions were recorded of around 12,000 bales at a price of Rs5,600 to Rs6,900/maund. Notable deals were recorded from Rohri, Saleh Pat, Liaquatpur, Khanpur, Mirpur Dewan, Bahawalpur, Rajanpur, Jalalpur, Yazman and Layyah.

The deals reported to have changed hands on ready counter were: 1,000 bales, Rohri, at Rs6,450 to Rs6,650; 1,200 bales, Saleh Pat, at Rs6,500 to Rs6,700; 1,600 bales, Liaquatpur, at Rs6,800 to Rs6,900; 1,800 bales, Khanpur, at Rs6,850 to Rs6,900; 200 bales, Hasilpur, at Rs6,800; 1,000 bales, Mirpur Diwan, at Rs6,750; 400 bales, Ahmedpur East, at Rs6,700; 1,800 bales, Bahawalpur, at Rs6,500 to Rs6,600; 400 bales, D G Khan, at Rs6,600; 600 bales, Rajanpur, at Rs6,600; 600 bales, Jalalpur, at Rs6,575; 800 bales, Yazman, at Rs6,500; 400 bales, Haroonabad, at Rs6,000; and 2,000 bales, Layyah, at Rs5,600 to Rs6,000.

But the market continues to be affected on rumours that permission for import of cotton from India may be granted, particularly after the release of latest cotton production figures which are not encouraging. The reports of cyclone hitting western coast of India including Gujarat — a major cotton growing state was also a cause of concern for the cotton economy of both the countries.

In case a major disaster occurs and the cyclone causes extensive damage to standing cotton crop in Gujarat, it will not only hurt Indian textile industry but will also diminish the prospects of cotton exports to Pakistan, brokers said. As a result, cotton prices in India are consistently moving up which would also have an adverse impact on Pakistani textile industry if they import cotton from India at higher rates.

Pakistan has recorded export registration of 185,720 bales from August 1, 2017 to November 15, 2017.

On global front, world leading cotton markets closed easy including New York and Chinese markets. New York cotton market recorded mixed trend on its futures.