Cotton trade partially starts in Sindh with forward deals

KARACHI: Except for a few forward deals, the local cotton market remained devoid of trade for the eighth consecutive week in a row as a COVID-19 pandemic-led lockdown stalled most of the economic activities in the country, dealers said.

“The government has partially opened the export-oriented industry including textiles and hopefully cotton trade will fully start in the coming days. However, traders have started future buying, which shows ginning factories will start from June,” stakeholders said while talking to The News.

Brokers informed The News, around 20 trucks of cottonseed from lower Sindh were booked on forward deals at Rs3,300 to Rs3,700 per 40-kg, while five truckloads of cottonseed were booked at Rs1,725 to Rs1,750 per 40-kg. “There has been no deposit of these forward deals and prices might change by the time of the delivery. Delivery of these deals will be made between May 25 to June 5,” brokers said.

On the other hand, Pakistan Cotton Ginners Association has announced to take action against the traders involved in future trading, which it said would disrupt market trading and affect the ginners already having unsold stocks of 500,000 bales with them.

Stakeholders said ginners would have to sell their lint as old crop, as mills would be careful in buying of lint in coming days. Delivery of imported cotton continued during the week.

According to growers, cotton sowing in lower Sindh was almost complete, while it would soon begin in upper Sindh. However, they complained of low seed germination. One grower said that germination remained around 30 to 40 percent and he had to sow seeds for few times to fill the land.

Growers said that cotton production in Sindh might be affected because of attack of locust swarms spreading in cotton belts of upper Sindh.

Sindh Chief Minister Murad Ali Shah has also written to Prime Minister Imran Khan, demanding federal government help to combat locusts, but no support has been received so far.

Cotton sowing has started in several areas of Punjab, which initially targeted 5 million acres, but later reduced it to 4.5 million acres without giving any solid reason by the provincial agriculture authorities.

Federal Committee on Agriculture will set the cotton sowing target this time after surveys and consultations with the stakeholders.

Stakeholders said that new Cotton Policy 2020-21 was in the making and would be announced after consultation with the stakeholders, while gowers demand for setting a fair cotton support price was yet to be met. They were hopeful that support price would be included in the new policy.

Chairman Karachi Cotton Brokers Forum, Naseem Usman, said cotton prices were fluctuating around the world. New York Cotton Market recorded July futures at 55.84 cents per pound. Prices remained stable in China, while there was little decrease in prices in India.