Traders sign cotton contracts again after 10-week pause

KARACHI: Cotton traders have signed new contracts again after a gap of nearly two-and-a-half months of lockdown, though the market will gradually resume trade in the first week of June, sources said on Saturday.

Around 600 bales of Ghotki cotton were sold for Rs8,500/maund during the week after long Eid holidays, while 50 maunds of cottonseed from Badin were sold at Rs3,500/40kg.

Besides, the first deal of new crop 2020/21 was recorded at Rs7,800/maund. Delivery will be given between June 5 to 10.

Karachi Cotton Association kept the official spot rate intact at Rs8,600/maund, while ginners are still waiting for buyers for their 500,000 bales.

Stakeholders said trading will start in the first week of June gradually, “which will pick pace after June 15, as manufacturing of garments is slow after Eid and the market is still in the grip of uncertainty after an increase in the coronavirus cases”.

According to reports, textile sector is again getting import orders from Europe and the US. Some buyers who had cancelled deals are again giving their orders to Pakistani exporters.

This year, locusts have attacked cotton crop before completion of sowing, which has disturbed growers. Wheat crop is slightly damaged, but cotton and paddy are expected to be damaged at a larger scale.

There is no coordination between the provincial and federal governments over anti-locusts spray. Thus, loss of growers is multiplying who demanded the government to cooperate with each other by subsiding political differences.

At least, 10 districts of Sindh are affected with locust attacks and the growers have estimated a loss of approximately Rs500 billion damage top the crops.

Stakeholders said cotton was suffering from locusts attack and low germination seed this year, which would affect the production and cotton estimates would also be not so much accurate. Cotton crop is being affected in upper Sindh and Punjab due to locust attack.

The crop is in better condition in lower Sindh, but paddy and chillies have been preferred over cotton sowing in some areas.

Karachi Cotton Brokers Association Chairman Naseem Usman said that international markets showed declining trend during the outgoing week. Tensions between China and the US have again erupted over spread of coronavirus and China’s control of Hong Kong.

Due to these tensions, New York Cotton Market recorded a decline of 56.50 cents/pound, which is three week lowest rate. However, cotton exports from the US continued with China remaining the largest buyer of the week with 113,000 bales.

Lint prices in China remained stable, while they remained under pressure in India. Textile industry of India is also suffering and cotton consumption is declining over there.

The lockdown has also affected the textile industry of Pakistan and its exports have declined 64 percent during this period.