KARACHI: Trading activity on the cotton market came to standstill on Thursday due to oversold position attained by many sellers in post-Eid dealings.

When trading resumed after Eidul Fitr holidays on Tuesday, the backlog of phutti (seed cotton) forced many ginning units to come under operation. However, phutti supply could not be sustained for long because the arrival was slow, particularly from lower Sindh where early sowing was largely lost due to heat wave while late sowing suffered due to irrigation water shortage.

According to cotton exporter Munawar Ali – who surveyed lower Sindh – only 70 per cent sowing could be done so far in areas below Sanghar district which normally produce around two million bales.

“This means there would be a shortage of around 400,000 to 500,000 cotton bales in lower Sindh areas where early sowing was done in March,” he said.

However, Mr Ali said, now there is gradual improvement in flow of water but many growers are reluctant in sowing cotton while giving the excuse that it is off season.

Nevertheless, he said, central and upper Sindh has witnessed normal cotton sowing and production would remain static at around two million bales or may even improve if climate conditions remain favourable.

He said if early cotton sowing in lower Sindh had been normal, there would have been high arrival of phutti which normally starts from end May or early June. But this has not happed so the arrival of cotton is currently extremely slow and restricted, he added.

Cotton analyst Naseem Usman said growers were quite optimistic for the new cotton season. “Many farmers, after suffering heavy losses in sugarcane crop due to a glut, were planning to go for cotton crop this season but water shortage dashed their expectations,” he explained.

He further said that reports coming from India are also not encouraging where many cotton growing areas are also facing water shortage. According to the Indian Independent and Professional Investment and Credit Rating Agency (IIPICRA), the size of new crop would be at around 30 million bales only.

The agency has put these estimates after going through the figures of cultivated area of Indian cotton which has come down from 12.2 million hectors to 11.4 million hectors this season.

The world leading cotton markets gave mixed trend with New York partially recovering for far off contracts but moving lower for maturing July contract.

The Karachi Cotton Association (KCA) slashed the spot rate by Rs100 to Rs7,500 per maund. On ready counter only 400 bales (old crop) from Ahmed Pur East changed hands at Rs7,250 per maund and 200 bales (new crop) from Shahdadpur.

Published in Dawn, June 22nd, 2018