Cotton market face declining trend with arrival of new crop

Cotton market is facing declining trend with the arrivals of new crop (August 2015 / July 2016), The lint cotton prices have dropped by Rs350 to 400 per maund (37.32 kgs) while seedcotton prices have red a declined by Rs 500 to Rs 600 per 40 Kilogrammes. The new crop seedcotton prices are presently said to be ruling from Rs 2300 to Rs 2500 per 40 Kgs, according to the quality. In the Punjab, seedcotton prices from the new crop said to range from Rs 2500 to Rs 2600 per 40 kilogrammes.

New crop lint cotton was also weaker and is said to have ranged from Rs 4900 to Rs 5000 per maund (37.32 Kgs) in Sindh and from Rs 5100 to Rs 5200 per maund in the Punjab. Till now, a reported seven ginning factories in Sindh are said to have become operative and are ginning the new crop, while in the Punjab three ginning factories are pressing the new crop. Thus a total of ten factories have started ginning the new crop in Pakistan.

In ready sales of new crop cotton (August 2015 / July 2016), 200 bales of new crop cotton from Sultanabad in Sindh reportedly sold at Rs 4,600 per maund with delivery stipulated on the 25th of July 2015. Furthermore, ready cotton sales included 400 bales from Hyderabad at Rs 4900 / Rs 4925 per maund, 200 bales from Shahdadpur sold at Rs 4925 per maund, while 200 bales from Tando Adam and 400 bales from Kotri both are said to have been sold at Rs 4950 per maund.

The price of raw cotton is not only weak, but yarn prices are also weak. With a new cotton crop (2015/ 2016) output presently being projected as being satisfactory there is said to be increasing pressure on cotton prices, much to the detriment of the cotton grower.

There is much worry in business circles regarding the impending political future in the country. Moreover there are also reports regarding a financial crunch in the country so that money availability has reportedly become tight which has become a worry for business and trading houses.

Cotton prices are said to be facing continued pressure. Regarding cotton consumption in Pakistan during the outgoing 2014 /2015 season, it is said to be around 15.5 million bales of domestic size (155 Kgs). Mills consumption for the next season (2015 / 2016) is projected around 15.5 million domestic size bales.

Pakistani mills claim that their viability has been badly eroded due to low yarn demand from China and increase in government taxes imposed / increased by the government in the federal budget announced earlier this month,.

On the global economic and financial front, at midweek mixed feelings on the equity markets were reported in the United States, but several European markets as well as the Asian markets posted sizeable losses in their values. Other reports indicated that the six-year bull run in the American stocks markets is facing a fatigue which is projected to last till the end of the current year (2015).