KARACHI, July 7: Cotton market on Monday showed firm trend as ginners raised their asking prices followed by reports of heavy rains in the entire cotton belt, which had delayed arrivals of phutti into the ginneries.
“Picking operations of phutti in the lower Sindh cotton belt are expected to remain suspended for a week if there is no fresh rain, delaying arrivals in the ginneries and fuelling price flare-up,” brokers said.
Prices of new crop were quoted higher by Rs25, while that of the current crop by Rs50 to Rs75 per maund, but ginners appear to be in no hurry and are holding to their unsold stocks anticipating further rise.
The monsoon rain during the last two days throughout the country has altogether changed the future cotton outlook and both the ginners and growers are expected to be on the winning side during the coming months.
“The current rain is beneficial for the standing crop as it accelerates the growth of the plant on the one hand, and washes away insects on the other leading to a healthy crop,” cotton analysts said.
They said the rain at this time of the season is more beneficial for the cotton crop as compared to at the time of picking of phutti, which damaged the quality of lint.
“Indications are that as the latest weather reports said the monsoon rainfall is expected to be above normal but warm weather in between could hasten the growth of the new crop,” they said.
Meanwhile, some of the spinners and leading mills have offered to buy the balance of current crop amounting to about 45,000 bales at around Rs2,500 per maund, about Rs50 to Rs75 higher than a week earlier amid reports that foreign demand for yarn and cloth is picking up.
Higher world prices of lint despite reports of good crop in China and the US was said to be another aiding factor for the local market.
The market could heat up after the current spell of rain is over and the arrivals of phutti into the lower Sindh and central Punjab cotton belt get normal.
Official spot rates were quoted unchanged at around Rs2,400 per maund but in physical trading spinners offered to buy new crop lint at around Rs2,350.
Ready offtake was light as ginners held on to their positions anticipating further rise in prices. As a result, only 200 bales of new crop from the lower Sindh ginneries, Sultanabad and Mirpurkhas changed hands at Rs2,315 and Rs2,350 per maund.