KARACHI, Sept 12: Cotton prices on Friday rose sharply as spinners indulged in panic buying followed by reports of breeding of pests in some of the areas of southern and central Punjab cotton belt.
Official warning to growers to extensively spray the breeding areas of the American bollworm in the crop areas was taken here by the spinners and mills as signal for an imminent pest attack, brokers said.
“Fears of damage to standing crop in the major growing areas of the quality lint worried spinners who made hasty buying, hence the increase in prices,” they added.
The lower Sindh crop was damaged by 4 to 5 per cent in July rain and but the crop loss was modest and did not influence prices.
Some of the fine lots from the central Sindh cotton belt were sold at Rs2,500 per maund and brokers predict further increase in prices if the farmers of the Punjab did not take timely step to check the spread of breeding in the crop areas.
Higher New York cotton future prices was an aiding bullish factor, which fuelled the current run-up, dealers said.
Phutti prices, which have fallen below Rs1,000 in line with lint prices also showed sympathetic increase as some of the growers fixed their stocks around Rs1,025 per 40 kg.
Market sources said owing to sudden increase in prices and mill willingness to grab the floating stocks irrespective of the speculative rise, tells things on the export front are pretty comfortable.
Ginners, therefore, turned selective hoping further increase in prices as leading among them held on to their positions awaiting further developments on the supply front.
Meanwhile, reports coming from the Punjab cotton belt indicate that more factories have resumed operations in the central zone and their daily turnout has risen to 30,000 bales, bulk of which is being consumed by the local spinners.
On the export front, private sector exporters and the Trading Corporation of Pakistan has physically shipped 6,953 bales including 265 bales of the new crop to different destinations in July.
Official spot rates were not revised upward in line with the ready prices owing perhaps to quality differentials and were held unchanged.
Ready offtake was light totalling about 2,500 bales, all from the Sindh ginneries as under: 1,000 bales, Shahdadpur at Rs2,475, 400 bales at Rs2,500, 200 bales, Khipro at Rs2,425, 200 bales at Rs2,475 and 200 bales, Sultanabad at Rs2,400.