Some light on the Pakistan Cotton market on arrival of new crop

Some light on the Pakistan Cotton market on arrival of new crop

Cotton market is facing declining trend with the arrivals of new crop (August 2015 / July 2016), lint cotton prices have dropped by PKR Pakistan Rupee 350 to 400 per maund (37.32 kg), while seed cotton prices declined by PKR 500 to 600 per 40 Kilogrammes.

The new crop seed cotton prices are presently said to be ruling from PKR 300 to 2500 (around USD 24.60) per 40 Kgs, according to its quality. In the Punjab, seed cotton prices from the new crop said to range from PKR2500 to 2600 per 40 kilogrammes.

New crop lint cotton was also weaker and is said to have ranged from PKR 4900 to PKR 5000 per maund (37.32 Kgs) in Sindh and from PKR 5100 to PKR 5200 per maund in the Punjab. Till now, a reported seven ginning factories in Sindh are said to have become operative and are ginning the new crop, while in the Punjab three ginning factories are pressing the new crop. Thus a total of ten factories have started ginning the new crop in Pakistan.

In ready sales of new crop cotton (August 2015 / July 2016), 200 bales of new crop cotton from Sultanabad in Sindh reportedly sold at PKR 4,600 per maund with delivery stipulated on the 25th of July 2015. Furthermore, ready cotton sales included 400 bales from Hyderabad at PKR 4900 (USD 48.16) / PKR 4925 per maund, 200 bales from Shahdadpur sold at PKR 4925 per maund, while 200 bales from Tando Adam and 400 bales from Kotri both are been sold at PKR 4950 per maund.

The price of raw cotton is not only weak, but yarn prices are also weak. With a new cotton crop (2015/ 2016) output presently being projected as being satisfactory, there is foreseen to be increasing pressure on cotton prices, much to the detriment of the cotton grower.

There is much worry in business circles regarding the impending political future in the country. Moreover, there are also reports regarding a financial crunch in the country, so that money availability has reportedly become tight which has become a worry for business and trading houses.

Cotton prices are said to be facing continued pressure. Regarding cotton consumption in Pakistan during the ongoing 2014 /2015 season, it is said to be around 15.5 million bales of domestic size (155 Kgs). Mills consumption for the next season (2015 / 2016) is projected around 15.5 million domestic size bales.

Pakistani mills claim that their viability has been badly eroded due to low yarn demand from China and increase in government taxes imposed / increased by the government in the federal budget announced earlier this month.

On the global economic and financial front, at last midweek, there were mixed feelings on the equity markets were reported in the United States, but several European markets as well as the Asian markets posted sizeable losses in their values. Other reports indicated that the six-year bullish attitude of investors in the American stocks markets is facing a fatigue, which is projected to last till the end of the current year (2015). 

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