Slow trading activity witnessed on cotton market

The Pakistan cotton market on Thursday witnessed slow trading activity with few buying interest on the part of the spinners. The domestic cotton market is passing through a lackluster phase, moreover from the remaining 550,000 bales (155 kgs) of unsold quantity of cotton barely about 150,000 bales may be of better quality from the current crop (August 2015/July 2016), mills are hardly making any purchases.

Thus, on Thursday the price of seed cotton (Kapas/Phutti) in Sindh is said to have ranged from Rs 1800 to Rs 2700 per 40 Kgs, according to the quality. In the Punjab, the seed cotton prices are said to have ranged from Rs 2000 to Rs 2700 per 40 Kgs, as per quality. Very little quantity of seed cotton now remains available in the market.

Traders added that cotton market is mostly on the quiet side with lack of much activity. Prices of cotton from Sindh reportedly ranged from Rs 4500 to Rs 5500 per maund (37.32 Kgs), according to the quality. In the Punjab, lint prices are said to have ranged from Rs 4800 to Rs 5500 per maund, as per quality.

In Sindh, 1200 bales of cotton from Mehrabpur were said to have been sold at Rs 5100 per maund (37.32 Kgs), while in the Punjab 600 bales from Harunabad reportedly sold at Rs 5300 per maund in an insipid market. The output of the current cotton crop (August 2015 / July 2016) has been disastrous.

Moreover, from the projected 15 million bales (155 Kgs) envisaged at the beginning of the season, only about 9.8 million bales will be reaped. This is a major disaster for the cotton economy of Pakistan and is almost unprecedented.

A one Day Conference on Cotton will be held on Tuesday, March 15, 2016 to consider and debate the causes of this disaster, specially in Punjab. Both the government and the private sector have been invited to participate and evolve necessary plan of action to obtain a better crop next year.
The KCA has invited representatives of the All Pakistan Textile Mills Association (APTMA), Pakistan Cotton Ginners Association (PCGA), Farmers Associates Pakistan (FAP), prominent growers and senior members of cotton trade as well as officials of ministry of Textile Industry. Government of Pakistan has also consented to attend the Conference for the best interest of the cotton economy.

On the global economic and financial front, various signs and signals clearly indicate that the world economy continues to slide downwards. Indeed the International Monetary Fund (IMF) has pleaded strongly for concerted efforts and actions to forestall a global economic slide. IMF pointed out that procrastination on the part of global economic leaders is dangerous when they deem that they have exhausted all the means to boost the global economy. Such inertia and lack of will on the part of global economic leaders, particularly from the advanced economies, increases the downside risks to the global economy.

Indeed the IMF has stated in no uncertain terms “amid a pull out of capital from emerging economies and a sharp contraction in global trade” remains a palpable threat to the global economy. Indeed the IMF Deputy Managing Director David Lipton is reported to have said earlier this week that “Moreover, risks have increased further, with volatile financial markets and low commodity prices creating fresh concerns about the health of the global economy”.