Pakistanâ€™s raw cotton prices due to fear of rain damage which may produce water-laden lint due to the continuing rainfall in several parts of the cotton belt remain under pressure. Moreover, global weakness in cotton and yarn prices is also pressuring the cotton prices.
Within a week or so, prices of seedcotton (Kapas/Phutti) have also reportedly declined by about Rs 200 per 40 Kilogrammes. The seedcotton prices in Sindh on Thursday ranged from Rs 1700 to Rs 2200 per 40 Kgs, while in the Punjab it ranged from Rs 1700 to Rs 2300 per kgs in a quiet market.
Lint prices was also reported to have declined by Rs 100 to Rs 200 per maund (37.32 Kgs) within a week. Thus in Sindh Cotton prices ranged from Rs 4650 to Rs 4700 per maund (37.32 Kgs), while in the Punjab it was between Rs 4800 to Rs 4900 per maund.
Traders said in Karachi that nearly 100 ginning factories in both Sindh and Punjab are pressing the new crop of cotton (August 2015 / July 2016) in Pakistan. Other reports added that seedcotton equalling to nearly 40,000 bales (155 Kgs) from the new crop is arriving daily.
The Trading Corporation of Pakistan (TCP) had earlier invited tender for the sale of 95,000 bales of old crop cotton (2014/2015) . From this figure, only one group of textiles showed interest and bought 6,800 bales of cotton at Rs 4800 to Rs 4900 per maund. Yarn sales are moving very slowly and most of yarn business is said to be dull and depressed.
In the mean time, the textile and all its affiliated sectors have reportedly started to close down. Besides the imposition of withholding tax and high costs of inputs, the textile industry leaders are complaining that the resultant high cost of doing business compared to their regional competitors have put the Pakistan textile industry at a great disadvantage.
Torrential rains and floods in cotton growing areas have drenched large tracts of the cotton belt. However, some observers said that if parts of the cotton growing areas have suffered, other areas have gained due to receipt of sufficient moisture.
Thus both the cotton and textile sectors in Pakistan are subdued while transactions of cotton and textile items remain slow. In other words, both cotton growers and textile millers are not doing well and the ginners are also said to be disappointed.
In ready cotton sales on Thursday following deals exchanged hands: 600 bales of cotton from Mirpurkhas were said to have been sold from Rs 4625 to Rs 4690 per maund while 400 bales of cotton from Shahdadpur in Sindh were sold at Rs 4650 to Rs 4700 per maund (37.32 Kgs), 400 bales from Hyderabad sold at Rs 4700 to Rs 4725 per maund, while 200 bales from Tando Adam sold at Rs 4725 per maund. In the Punjab, 600 bales from Pakpattan reportedly sold at Rs 4775 to Rs 4900 per maund.
Though production may not suffer sizably as per current reckoning, some quality problems may arrive in the new crop (2015 / 2016) due to cotton getting wet and discoloured.
On the global economic and financial front, all Chinese shares prices fell to deep depth when they suffered their biggest one day fall in eight years last Monday. Chinese Government scrambled to enter the market with a buying programme to prop up stock prices. In the process, hundreds of billions of dollars were lost instantaneously shaking the confidence of the economic well being throughout the world. This negative development of the Chinese economy has shattered any hope that the global economy will mend and repair its persisting downturn any time in the foreseeable future.
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