KARACHI, Dec 1: On the intervention of the Trading Corporation of Pakistan (TCP), raw cotton prices recovered substantially when trading resumed in the local market on Monday.
Under the government directives, the TCP has started procurement of lint from ginners at a support price of Rs3,202 per maund. As a result, raw cotton prices improved a lot and are expected to remain stable above Rs3,000 per maund during the rest of the season.However, cotton analysts said the TCP intervention is too late because growers have already sold much of their crop and there was little possibility that it will benefit them which has been the objective of the government.
The trading volume also increased manifold on fears that cotton import form India would not be possible under current tense situation between the two countries.
Last year Pakistani spinners in total import around 3.7 million bales. Of this, 2.7 million bales were imported from India. However, looking at the current situation, spinners believe it would be difficult to import such a huge quantity from India.
Consequently, there was a sudden rise in buying from spinners who preferred to replenish their stocks at current price. However, TCP intervention has a positive impact on lint price.
Cotton analyst Naseem Usman who had an extensive tour of cotton growing belt in Punjab last week told Dawn that many growers have already removed their cotton plants by foregoing their third and last picking.
He said attractive support price fixed at Rs950 per 40 kgs by the government for wheat procurement lured growers to go for maximum wheat sowing, and in a haste they even removed their cotton plants without going for third and the last picking.
According to some estimates last fortnight (Nov 15 to 30), phutti arrival remained higher to give a total production of around 8.8 million bales. Therefore, it strongly indicates that the country would be producing around 10.2 million bales this season. The Karachi Cotton Association (KCA) also increased cotton spot rates by Rs50 per 40 kgs to Rs2,950 (ex-ginned price) and Rs3,050 (Ex-Karachi).
Meanwhile, trading on ready section remained high where spinners were seen in the forefront of replenishing their stocks on fears that higher prices in coming days and difficulty in importing cotton from neighboring country.
The following transactions were reported to have changed hands on Monday on ready counter: 400 bales from station Sanghar done at Rs2750, 1000 bales from Shahdad Pur done at Rs2,750 to Rs2800, 600 bales from Khipro done at Rs2,750 to 2,800, 1,200 bales from Lodhran done at Rs2,900, 3,000 bales from Khan Pur done at Rs3050, 400 bales from Rahim Yar Khan done at Rs3,000, 400 bales from Fazil Pur done at 3,000, 5,400 bales from Noor Pur done at Rs3,040 to Rs3050, 2800 bales from Ahmed Pur done at Rs3,040, 3,050, 2,800 bales from Rajan Pur done at Rs3,000 to Rs3,040, 1,400 bales from Liaquat Pur done at Rs3,000, 600 bales from Chani Goth done at Rs3,000, 1,000 bales from Uch Sharfi done at Rs3,000 to Rs3,050, 1,200 from Ali Pur done at Rs3000 to Rs3,050, 6,000 bales from Kabir Wala done at Rs3050, 400 bales from Shadan Lund done at Rs3,000, 1,400 bales from Bahawalpur done at Rs3,000, 400 bales from Mubaril Pur done at Rs3,000 and 1,000 bales from Yazman done at Rs3,000.