June 22, 2008	Sunday	Jamadi-us-Sani 17, 1429

KARACHI, June 21: The new crop seed cotton (phutti) prices on Monday rose to an all-time peak level of Rs2,100 per 40kg and spinners appear to be in an obliging mood amid fears of another short crop.

Reports reaching here from the central Punjab cotton belt indicate that arrival of new crop phutti has started in Sahiwal, Burewala and some other areas on a modest scale and some of the growers had made spot sales at this rate, claimed chairman of the Karachi Brokers Association.

Picking operations of phutti in the lower Sindh are also in progress and some of the ginneries are expected to resume operations by the middle of next month.

Previously seed cotton (phutti) had touched Rs1,750 per 40kg and lint Rs3,650 per maund a couple of years back when the crop had hit the low below 10 million bales, analysts said.

“The opening new crop phutti rate is too high, which will further add to the existing problems of the textile sector, neglected in the new budget,” fears a spinner.

“In typical Pakistani conditions, there are not many traditions where supply and demand factors have ever played truly operative role,” he said, adding: “early price flare-ups are generally sustained in the subsequent weeks and in some cases is added more to them.”

“The input costs, fertiliser, pesticide and power had already touched an inhibiting level and added to it is an expensive irrigation by tubewells,” said a progressive farmer, adding: “we are eyeing further increase in phutti prices after full picking operations resume in the entire cotton belt.”

“Prices of all the commodities had hit all-time highs during the last couple of months for various reasons, including hoarding and smuggling,” said another grower, adding: “why phutti should be an exception.”

Growers said the recent rain in most of the cotton-growing areas has raised prospects of a good crop as it would significantly add to the growth of plants and washed away pests.

The official spot rates were firmly held at the last level of Rs3,800 per maund, although some of the deals were done above them.

New York cotton futures on the other hand showed a modest rise of 0.23 and 0.04 cents per lb at 71.67 and 76.29 cents for both the ruling July and the forward October delivery.

Meanwhile, a Sultanabad ginner signed a forward deal of 200 bales at Rs3,700 per maund for delivery in September.

In the ready section, a big deal of 2,400 bales, Daharki changed hands at Rs3,850.