Buying rush on cotton market
KARACHI: Cotton prices rebounded on sudden revival of buying from leading spinners who chased quality lots in order to replenish their inventories.
A host of factors induced buying sentiment including reports that the Plant Protection Department (PPD) — despite collecting applications from spinners — has so far not issued ‘no objection certificate’ or withdrawn the notification banning cotton imports from India.
However, the main reason behind the buying spree were reports which suggest that cotton crop in India’s Maharashtra, a major cotton growing state, has suffered up to 50 per cent damage due to pest attack.
The crop loss is so huge that official estimates have pegged it at a whooping Rs150 billion. This has totally changed the spectrum of cotton crop in the region for both India and Pakistan.
As a result, Pakistani spinners are panicking and rushing to get hold of any lots which suit their quality standard. This buying rush has once again pushed cotton prices close to a seasonal high level of Rs7,000 per maund.
Buyers chased big lot deals and did not consider rising prices that may disturb their world parity in yarn.
A sudden turn in situation after Indian crop’s report of huge damage has disturbed the entire cotton economy.