KARACHI: Strong cotton buying took place on Saturday as many leading spinners rushed to replenish their stocks at higher level.
The underlying sentiment turned optimistic amid reports that cotton yarn off-take has started picking up. This prompted spinners to pick up big cotton lots of their choice.
However, it was interesting to note that cotton prices remained steady even after the release of a Statuary Release Order (SRO) removing Customs Duty and Sales Tax on the commodity’s imports. There were apprehensions that local cotton prices would come under pressure once the SRO is issued. However, there is still substantial demand for local cotton coming from the textile industry.
Meanwhile, there are strong indications that the current cotton season would end much earlier. Currently the third and last picking is going on and the flow of phutti (seed cotton) is very slow.
Cotton experts have warned the government that in order to avoid mammoth cotton import bill next year necessary measures should be taken at war footing for increasing crop production.
Beside, massive reduction in cotton cultivation area, the crop had been suffering from other factors including poor quality seed and large scale use of expired pesticides. All this has pulled down production from around 15 million bales to little over 10m bales in a period of five year.
The world leading cotton markets continued to give mixed to easy trend. Indian and New York cotton closed easy after experiencing erratic price behaviour.
The Karachi Cotton Association (KCA) spot rates were firm at last closing at Rs8,700 per maund.
The following deals were reported to have changed hands on ready counter: 1,131 bales, station Rohri, at Rs8,200; 1,200 bales, Mirpur Mathelo, at Rs8,800; 2,000 bales, Khairpur Mirus, at Rs8,100; 1,000 bales, Rahim Yar Khan, at Rs8,800 -8,850; 3,000 bales, Khanpur, at Rs8,700-8,850; 400 bales, Haroonabad, at Rs7,950; 400 bales, Chishtian, at Rs8,800; and 400 bales, Hasilpur, at Rs7,400.
Published in Dawn, February 3rd, 2019