KARACHI: Cotton prices moved lower for the second consecutive day on Tuesday as spinners moved away from the trading ring and began to look into the prospects of importing cotton.
During the last two days prices came down by up to Rs300 per maund – still exceeding import parity and standing high. Spinners believe that their import parity stands at around Rs6,000 per maund.
As a result, phutti (seed cotton) prices also came down for both Sindh and Punjab varieties.
Private estimates still place cotton crop size at 12 million bales which is much closer to official estimates.
The ground for fear of short crop could not be ascertained though the issue of lint quality is quite understandable, brokers said.
Higher acreage coming under cotton crop plantation this season is reckoned to off-set crop losses due to damage by rains and the heat wave while the current situation is highly uncertain, brokers added.
Big spinners, however, withdrew and seem keen to import cotton to meet their remaining seasonal cotton demand. Ginners are presently in worst position because they have already purchased phutti from growers but are now unable to sell it to spinners.
The spinners after purchasing cotton at higher prices are now only interested in selling yarn in the domestic market because they could not compete in the world market, observed international indenter, Noman Anwar.
Capitalising on this, Indian spinners have moved in and are exporting yarn to China and Bangladesh, Mr Anwar said, adding that he too imported yarn from India for onward exports to China and Bangladesh.
However, the spell of rain in Punjab could help increase phutti arrival after washing away smog and ultimately improve cotton production, said cotton broker Naseem Usman.
The world leading cotton markets generally remained easy, with New York cotton closing lower for all future contracts.
The Karachi Cotton Association (KCA) spot rates were revised downward by Rs100 to Rs6,450 per maund.
The following major deals were reported to have changed hands on ready counter: 2,000 bales, Khairpur, at Rs6,450 to Rs6,500; 2,800 bales, Rahimyar Khan, at Rs6,700; 1,200 bales, Rajanpur, at Rs6,600 to Rs6,700; 1,600 bales, Sadiqabad, at Rs6,700; 800 bales, Ahmedpur East, at Rs6,500; 800 bales, Ghotki, at Rs6,700; 1,200 bales, Bahawalnagar, at Rs6,325 to Rs6,400; 1,800bales, Haroonabad, at Rs6,275 to Rs6,400; 2,200 bales, Mianwali, at Rs6,325;1,000 bales, Fort Abbas, at Rs6,450; and 1,200 bales, Chishtian, at Rs6,275 to Rs6,400.
Published in Dawn, November 15th, 2017
