Reduction in cotton prices

The world leading cotton markets gave mixed trend with New York cotton closing steady and Chinese cotton moved lower. The following deals were reported to have changed hands on ready counter: 4,000 bales, station Tando Adam, at Rs 8,900 to Rs 9,200;1,000 bales, Hyderabad, at Rs 9,000 to 9100; 1,600 bales, Sanghar, at Rs 8,900 to Rs 9,100; 2,000 bales, Shahdadpur, at Rs8,950 to Rs9,200; 1,000 bales, Kotri, at Rs8,900 to Rs9,100; 200 bales, Haroonabad, at Rs 8,900; 200 bales, Burewala, at Rs 8,900; 200 bales, Jhang, at Rs 8,950; and 200 bales, Chichawatni, at Rs 8,950.

Increased flow of phutti (seed cotton) helped to expand trade volume as spinners happily replenished their stocks on falling cotton prices. It was motivating to note that cotton prices are continuously sinking along with dollar since the recent general elections.

The Karachi Cotton Association (KCA) has to lower spot rates in sympathy with ready counter rates by Rs 200 to Rs 9,000 per maund.

There is a marked increase in trading volume which indicates that the flow of phutti from cotton fields into ginneries has improved. However, some brokers are of the view that many ginners have taken over-sold positions which swelled trading volume.

The going on spell of rains in Northern Areas, Punjab and some upper parts of Sindh is proving a boon for growers of cotton crop as it will help in better yield.

Brokers said that, due to moisture there is always fear of pest attacks and the government will have to closely monitor the crop.

Cotton prices moved lower on Monday in line with the falling parity between the US dollar and rupee. The rapid appreciation in rupee value against dollar is taking its toll on commodity prices. The recent rising trend in commodity markets after the rupee depreciation has started to reverse, with cotton moving below Rs 9,000 mark in less than a week.