KARACHI: Trading on the cotton market remained suppressed on Saturday as leading spinners continued to stay on the sidelines. Uncertainty and fear of volatility in the currency market has kept buyers sceptical and cautious.

According to brokers, the cotton market remained devoid of activity, with spinners marking time in order to avoid any unforeseeable development on the economic front, brokers said.

The sudden gas shortage has already shaken up the confidence of industry which was slowly reeling back to normal production after getting some concessions in utilities tariff for five export-oriented industries, they added.

Meanwhile, there are serious concerns over the cotton crop size. The private sector estimates it to be no more than 10.5 million bales — a shortfall of one million bales than last year.

Cotton analyst Naseem Usman said a new farm policy is urgently needed so that surplus production in wheat and sugarcane could be curtailed.

The size of the cotton crop is falling year after year and import bill for meeting the shortfall is equally rising, therefore there is an urgent need to encourage cotton cultivation by ensuring quality seed, pesticide and also giving some other incentives, he suggested.

Mr Usman said that due to short crop the current cotton season is going to be shorter. Around 0.8m-1m bales would further come in addition to the 9.7m bales already harvested. This would mean that the country will have to import some 4m bales to meet the domestic industry’s demand, he explained.

On the global front, New York cotton moved higher after China started to import American cotton. The Indian cotton market slightly recovered after recent losses.

The Karachi Cotton Association (KCA) spot rates were unchanged at overnight level and stood at Rs8,800 per maund.

The following deals were finalised: 1,000 bales, station Rajanpur, at Rs9,000; 200 bales, Taunsa Shareef, at R8,400; and 200 bales, Burewala, at Rs8,150.

Published in Dawn, December 16th, 2018