Prices of premium quality lint lying unsold with ginners witness rise

The premium quality lint which are lying unsold from the current crop with the ginners witnessed rise in prices by Rs.300 to Rs.400 per maund (37.32 kgs) within one week in the ready market. The current unsold crop is less than 3 lakh bales.

The unsold stock lying with ginners is likely to see reduction in the quantity from 3 lakh to 2.50 lakh bales by the middle of this month. Much of it is of lower quality. This year (2013-2014) Pakistan has produced about 13.5 million bales (155 kgs) of cotton on an ex-gin basis.

The Karachi Cotton Association (KCA) has increased its ex-gin price of Grade three, cotton by Rs 200 per maund in four days and now fixed it at Rs 6,700 per maund (37.32 kgs) on Thursday.

The general price idea of cotton on Thursday for the current crop (2013-2014) from Sindh ranged between Rs 5,400 to Rs 6,400 per maund (37.32 kgs), depending on the quality of cotton. While, in Punjab it was from Rs 6,000 to Rs 7,000 per maund.

Most buying by the domestic mills was for the limited quantity of any better grades of cotton left in the market.

According to brokers, Punjab early arrival variety of cotton has been delayed, but new crop of early sown variety from Sindh is expected to arrive during the first week of July 2014.

Due to increase in cotton prices, yarn prices have reported a slight rise. But to the escalation in rupee rate against the dollar is creating problem for the exporter to sell yarn or even cotton waste to China.

Moreover several mills in Pakistan are forced to shut down their units due to increasing shortage of electricity supply. Most of the Pakistani mills are covered for cotton till the end of July 2014 with Pakistani and Indian styles. However, the larger units are covered till August 2014, some even beyond that month.

Few trading which reported to exchange hands in the Pakistan cotton market earlier in the week were sale of 200 bales of new crop (2014-2015) from Sanghar in Sindh at Rs 6,400 per maund (last Monday) for the first week of July 2014 delivery. Then 200 more bales of new crop from Sanghar was sold at Rs 6,550 per maund for July 15, 2014 delivery. Seed cotton (Kapas-Phutti) of new crop about 1,000 maunds was sold at Rs 3,175 per 40 kgs for July 2014 delivery.

On the global economic and financial front, though the United States cotton futures prices for the frontal month decreased, Indian offers for shipment cotton are still reported to be tight. During the first quarter of 2014 equity prices mostly slipped down further at midweek due to “bad weather” in the United States and also in parts of Europe.