The slow moving demand and falling lint prices in major world markets has lead to further drop in cotton prices on Monday in Pakistan cotton market. Moreover, the falling petroleum prices are attracting fibre consumers to go for polyester yarn and other man-made fibres which are also affecting cotton prices.
The cotton economy is presently in great distress because on the one hand, reduced lint prices are hurting growers and, on the other end, the textile industry is facing shortage of energy and gas.
The Karachi Cotton Association (KCA) reduced its spot rates by Rs50 to Rs4,950 per maund, indicating that the Trading Corporation of Pakistanâ€™s procurement operations have so far failed to produce results.
The following major deals changed hands on ready counter: 1,400 bales Khairpur at Rs4,750, 1,600 bales Bahawalnagar at Rs4,950, 1,400 bales Hasilpur at Rs4,950, 1,000 bales Fort Abbas at Rs4,975, 1,000 bales Khanewal at Rs5,000 to Rs5,050, 4,200 bales Bahawalpur at Rs5,000 to Rs5,050, 1,000 bales Ahmedpur at Rs5,050, 1,000 bales Alipur at Rs5085, 1,200 bales Rahimyar Khan at Rs5,100, 1,000 bales Liaquatpur at Rs5,100, 1,000 bales Sadiqabad at Rs5,100, 1,000 bales Mianwali at Rs5,100 and 2,200 bales Layyah at Rs5,100 to Rs5,125.
According to Shakeel Ahmad a fibre analyst, the Pakistan textile sector is facing dearth of fine grades, which would be a positive sign for the cotton sector besides cotton valuation. The recent weather in cotton growing belt in Punjab would suitable for standing crop, but shortage of energy to textile sector was still endangering the cotton growersâ€™ selling volumes.
Cotton production and demand by textile sector would go neck and neck and demand for fine grades would increase. Due to grade issue in parts of Sindh and Punjab stations leading buyers made forward deals for all grades of lint at around Rs 5,200 per maund to Rs 5,325 per maund.
On international front, New York December 2014 Futures stood at around 63 cents per pound and Cotlook A index was hovering around 70 cents per pound. The US, India and Chinese cotton markets are witnessing consistent fall because of expected bumper crops by most of the cotton-producing countries.
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