Domestic cotton prices remained cotton despite lower turnover

The prices of domestic cotton over the past several weeks have remained steady though there is a sharp slow down in the cotton turnover this year (August 2015/July 2016) of only about 9.8 million bales (155kgs) against the earlier projection of upto 15 million bales.

As per its fortnightly seed cotton (Kapas/Phutti) arrivals report for the current season (2015/2016) till the 15th of February, 2016, the Pakistan Cotton Ginners Association (PCGA) said the ginning factories received 9,687,118 lint equivalent bales.

From this quantity, the domestic mills are reported to have lifted 8,329,763 bales. The exporters have picked up 358,418 bales, while a quantity of 998,937 bales is still lying unsold with the ginners in both loose and packed form.

Seed cotton prices in Sindh generally ranged from Rs 1600 to Rs 2800 per 40 Kgs while in the Punjab it ranged from Rs 2000 to Rs 3000 per 40 Kgs.

Supply of seed cotton is now dwindling in the market. Lint prices in Sindh are said to have ranged from Rs 4600 to Rs 5550 per maund (37.32 Kgs) in a slow but steady market. In the Punjab, the lint prices reportedly ranged from Rs 4600 to Rs 5600 per maund, as per quality.

Even though the cotton crop is sizeably short in Pakistan this year (2015/2016), there has been no commensurate rise in lint prices because the textile industry is in bad shape due to high cost of inputs and several fiscal and other advantages being enjoyed by regional competitors.

Cotton consultant Naseem Usman has criticized the lack of attention of the government, cotton scientists and official organisations towards the betterment of the cotton crop which is generally being ignored and is suffering over the past several years due to low quality and very short output this year.

The cotton is the backbone of Pakistan’s economy and thus it needs the foremost attention of the government. Otherwise, next year’s crop will also suffer in a big way.

Several mills are reported to be using imported cotton and yarns, mainly from India, Even lower grade yarns are reportedly being imported from India. Therefore, the prices of local cotton yarns are not so good, though some enquiry for yarn has emerged in the local market recently. Export enquiries for yarns are said to be few.

Following deals have changed hands: Sale of 400 bales of cotton from Hingorja in Sindh was reported at Rs 5225 per maund (37.32 Kgs), while 400 bales of cotton from Yazman Mandi in Punjab was reported to have been sold at Rs 5325 per maund on Thursday. Moreover, 600 bales from Mianwali sold at Rs 5475 per maund and 1000 bales also from Mianwali sold at Rs 5480 per maund.