KARACHI: Cotton prices moved lower on Wednesday, in line with New York cotton market.

The fading out of two major hurricanes — Harvey and Irma — without much damage to standing cotton crop in Texas and Georgia left prices under pressure the world over.

Trading resumed on overnight correction though activity remained moderate.

However, new developments are putting more pressure on cotton prices, particularly with higher production estimates by leading cotton producing countries including Pakistan.

The US Department of Agriculture has further revised cotton production forecast from previous 12 per cent growth to 20pc. The same is the case for Pakistan which is expected to produce around 12.5 million bales this season.

It is interesting to note that New York cotton moved both ways in the range of US12 cents during and after the phasing out of hurricanes.

This caused panic buying and selling. At one point, it touched peak level of US75.59 cents per lb but later reeled down to below US 70 cents per lb. As a result, cotton prices in the local market fluctuated too. After recording gains of up to Rs350 for Punjab variety, the prices eventually declined by Rs250-300 per maund. Similarly, Sindh quality cotton also lost Rs250 per maund during the last two sessions.

The only positive sign is that China – after disposing off its previous cotton stocks – could enter the world market to replenish its stocks. Secondly the current low cotton prices are attractive for spinners as yarn would be cheaper.

The Karachi Cotton Association (KCA) spot rates were firm at overnight level.

The following deals were reported on Wednesday: 2,000 bales, Mirpurkhas, at Rs5,950 to Rs6,000; 1,000 bales, Sinjoro, at Rs5,950 to Rs6,000; 2,000 bales, Sanghar, at Rs6,000; 2,600 bales, Tando Adam, at Rs6,000 to Rs6,025; 3,000 bales, Shahdadpur, at Rs6,000 to Rs6,050; 1,000 bales, Hala, at Rs6,050; 1,000 bales, Nawabshah, at Rs6,100; 2,000 bales, Khairpur, at Rs6,100 to Rs6,125; 1,000 bales Layyah, at Rs6,100 to Rs6,175; 1,200 bales, Hasilpur, at Rs6,150 to Rs6,200; 1,400 bales, Burewala, at Rs6,175 to Rs6,200; 800 bales, Vehari, at Rs6,150 to Rs6,175; and 800 bales, Moro, at Rs6,100.

Published in Dawn, September 14th, 2017