Ginning factories closed amid low cotton stocks

KARACHI: Local cotton market remained sluggish in the week, largely owing to dollar depreciation, dwindling yarn

demand, erratic global trends, and Ramzan timings, with ginners mostly opting to suspend their operations, traders said.

Traders were mostly expecting the slowdown to continue in the coming days, saying Covid-19 had affected the trade globally, which had also resulted in the less demand in the local market, which also came under the influence of the international markets.

The cotton season has almost ended and ginners are left with less than 60,000 bales that are also being sold gradually, as the lint was being purchased by some mills. However, trade volume is very low and almost all ginning factories have closed their operations.

Trade activity was also slow in the international market while prices kept fluctuating.

Traders said both the public and private sectors were making efforts to increase the cotton production in the country. However, Prime Minister had constituted a task force five months back under the leadership of All Pakistan Textile Mills Association but it was nowhere to be seen now.

Cotton prices remained at Rs10,200 per maund (40kg) to Rs10,600 per maund in Sindh, while lint fetched Rs10,800 per maund to Rs11,500 per maund in Punjab. Some deals on credit as well as of Balochistan cotton were finalised up to Rs12,500 per maund.

Spot rate committee of the Karachi Cotton Association kept the official spot rate unchanged at Rs11,300 per maund.

Chairman Karachi Cotton Brokers Association, Naseem Usman, told The News cotton markets were facing fluctuation the world over. For instance New York Cotton Market saw its July futures rising to 91 cents per pound from 85 to close at 88 cents on Friday, Usman said.

According to weekly report of the USDA, the US cotton exports declined 25 percent during the outgoing week. This week, Turkey remained the largest buyer with 20,900 bales followed by China with 15,900, while Pakistan remained the third largest buyer of the week with 13,400 bales.

Fluctuation also continued in Brazil, Central Asia, and India while overall market trend remained stable during the week.

Last year cotton production remained low to an alarming level. Looking at that, both the public sector and private sector are involved in efforts to raise the production and the government has announced Rs10 billion in various types of subsidies to the growers. Besides, Pakistan Cotton Ginners Association (PCGA) is also active to get lower markup loans for the growers.

PCGA has constituted a task force, which is visiting the farmers to raise their awareness while officials of the agriculture bank are also visiting the farmers along with the workers of the PCGA.