Multan: Cotton prices remained under pressure on Wednesday in line with world cotton markets while Karachi Cotton Association (KCA) decreased spot rates by Rs400 to Rs8300.
Yarn market also suffered due to decreasing trend in the cotton prices. Fall of Rs5 to Rs8 was recorded in prices of all types of yarn.
Cotton experts are of the view that prices will remain under pressure for few more days; however they will not fall rapidly due to demand and supply gap.
“Majority of the spinning mills have yet to fill their stocks, so there are very rare chances of sharp decline in prices in Pakistani market as compared to international markets including Indian cotton market,” said Syed Muddabir Shah, a cotton broker from Multan.
He said the farmers are resisting this declining trend in Phutti prices which can be seen from sizable fall in Phutti arrivals.
“Farmers have stopped the picking process which has been checking the sharp decline in cotton prices in Pakistan,” he said.
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He said that cotton picking will slowdown further in the coming days as rain spell is expected in cotton growing areas of Punjab from next week onwards.
He said that about 100 cotton ginning factories are currently functional in Punjab and 300 more are expected to come online after Eid.
“Similarly, about 120 cotton factories are functional in Sindh and it is being expected that number of functional factories will increase to 200 after Eid.
As many as 18 new factories have also been established in Sindh,” he said.
He said the cotton factories from Sindh never purchased Phutti from Punjab during peak cotton season — July to September — rather factories from Punjab would buy crops from Sindh during these three months.
However, for the first time, the factories in Sindh are looking to purchase the commodity from Punjab as brokers from Sindh have started to visit Punjab.
“This is another indicator that the prices will not decrease in Pakistani cotton market in coming days,” he added.
He said that decline of Rs400 in KCA spot rate is the highest during the last three to four years.
He said that the yarn market almost crashed on Wednesday and trading activities almost halted following the steep fall in prices.
Phutti prices were quoted within the range of Rs3,700 to Rs4,200.
The following deals were reported to have changed hands on ready counter: 1,800 bales, Tando Adam, at Rs8,250/8,400; 1,400 bales, Shahdadpur, at Rs8,250/8,400; 600 bales, Mirpur Khas, at Rs8,200/8,350; 1,200 bales, Sanghar, at Rs8,200/8,400; 600 bales, Shahpur Chakar, at Rs8,300/8,400; 800 bales, Hyderabad, at Rs8,200/8,400; 400 bales, Khadro, at Rs8,350/8,400; 400 bales, Nawab Shah, at Rs8,400; 400 bales, Masoodo Rind, at Rs8,300/8,400; 400 bales, Burewala, at Rs8,790/8,900; 600 bales, Chichawatni, at Rs8,675/8,900; 400 bales, Gojra, at Rs8,690/8,900; 200 bales, Hasilpur, at Rs8,800; 600 bales, Haroonabad, at Rs8,500/8,700; 400 bales, Sahiwal, at Rs8,500; 200 bales, Samandari, at Rs8,900 and 200 bales, Vehari, at Rs8,700.
(This news/article originally appeared in The Express Tribune on August 16th, 2018)