February 17, 2020

WEEKLY COTTON REVIEW Low trading observed.

Low trading was observed in cotton market. Ginners were under pressure.

No amount was allocated for the much discussed emergency program for increasing the production of cotton. No implementation from the concerned departments on the Prime Minister Imran Khan's resolve of not increasing the price of power for textile sector. According to All Pakistan Textile Mills Association it was difficult to run mills in these circumstances.

 

In the local cotton market during the last week cautious buying was witnessed by textile and spinning sectors. However, the rate of cotton remained stable but the trading volume remained low.

 

The textile mills are buying cotton from abroad while the delivery of imported cotton has increased. The reason behind its speedy delivery is that business is limited at local level. Though some ginners are not ready to sell cotton at low price but some ginners are facing problems in selling their cotton due to which they are under pressure. This year despite the extraordinary decrease in the production of cotton ginners had the stock of 8 lac bales, although the new crop will arrive in four to five months. According to the information received from the lower Sindh the wheat crop is ready. According to the farmers the sowing of cotton in lower Sindh will partially start from March which will be ready till June.

 

According to the two ginners of Tando Adam they will start ginning partially in June. On the other hand the seed producers of Punjab and Sindh are of the view that due to the low production of cotton the germination of seed will be approximately 50 percent which was usually 70 percent to 75 percent. Moreover the exact area of cotton sowing was not determined which was necessary for determining the exact production of cotton.

 

In Sindh and Punjab the rate of cotton is in between Rs 6800 to Rs 9200 per maund while the rate of Phutti which is available in limited amount is in between Rs 2600 to Rs 4100 per 40 Kg. In Punjab the rate of cotton is in between Rs 7000 to Rs 9200 per maund while the rate of Phutti is in between Rs 2800 to Rs 4400 per 40 Kg.

 

The Spot Rate Committee of Karachi Cotton Association has stabled the rate of cotton at Rs 9100 per maund. Chairman Karachi Cotton Brokers Forum Naseem Usman told that due to the Corona virus in China the business was badly affected in international market how ever, due to buying in New York Cotton Market six percent increase was recorded in exports in the weekly export report of USDA. Other than China increasing trend was witnessed in import of cotton. Turkey, Bangladesh, Vietnam, Indonesia and Pakistan are importing cotton from America in huge amount. The rate of New York Cotton is comparatively stable. The holidays were extended in China due to spread of corona virus. According to the reports partially businesses were started in China however fluctuation was observed in the rate of cotton in China while in India fluctuation is continuing.

 

Moreover, despite Prime Minister Imran Khan's clear instructions concerned departments are unable to solve the energy price issue. They had sent bills to textile sector at the rate of 20 rupees per unit plus surcharge which was condemned by APTMA.

 

APTMA warned that several mills of Punjab will be shut if the mills had to pay the bills inclusive of surcharge. The APTMA has issued a statement on receiving bill at the rate of Rs 20 per unit inclusive of surcharge to the export oriented industry. LESCO said that standing committee of National Assembly has stopped the depositing of the bill. The standing committee has asked to refer the matter to Economic Coordination Committee. Primer Minister Imran Khan has also abolished the surcharges but the bureaucracy is not implementing the orders of PM. It looks that they are failing the government. Before that bills were received on the rate of Rs 12 per unit. The industry will not survive after paying the bill at the rate of Rs 20 per unit.

 

Last Wednesday during the season of National Assembly state minister Ali Muhammad Khan told the House that Prime Minister Imran Khan has made an emergency plan for increasing the production of cotton. While answering a question ministers said that new variety of seeds will be provided to farmers for increasing the production of cotton. He said that only cotton will be sown on the area of cotton. He also said that other crops are being sown on the area of cotton. He said that government will provide assistance to the cotton farmers for increasing the cotton production. He assured that government will increase the production area of cotton. He also assured that government in future will implement Prime Minister emergency program for increasing the production of cotton in letter and spirit. He said that Sindh Seed Council has introduced two new varieties of cotton in Central Cotton Institute Sakrand.

 

According to cotton experts and departments associated with cotton has stressed their hope that positive results will come if the report of Ali Muhammad Khan will be fully implemented. They also said amount is allocated for cotton emergency program before that Rs 380 billion were allocated for Agriculture Emergency Program and not a single penny was allocated for cotton.

February 16, 2020

Restricted buying by mills on cotton market.

Mills showed less interest in fresh deals on the cotton market on Saturday owing to lack of fresh leads, dealers said.

The official spot rate was at Rs 9100, they added. In the ready session, only 400 bales of cotton from Rahim Yar Khan finalised at Rs 9000, they said.

 

Rate of seed cotton per 40kg in Sindh low quality was at Rs 2800, while the best quality was unchanged at Rs 4100, and in the Punjab prices of low quality were at Rs 2800 while the fine type was available at Rs 4600, they said. In Sindh, Binola prices per maund were at Rs 1400-1800, in Punjab rates were at Rs 1650-1800, they said and adding that rate of polyester fibre was at Rs 176 per kg, they said.

 

According to the market sources, the ginners and spinners were engaged in a battle of wits over lint and rates. It looks that local spinners and mills are not losing their confidence and are staying away from the new deals at the low rates. In the meantime, the ginners wanted to sell the commodity at the present levels despite the fact that they have not much unsold stock with them.

 

Cotton analysts said that prices may fall slightly in the near future. In the absences of basic facilities by the government, the growers and farmers were not any able to achieve desired target for the cotton production, they added. Adds Reuters: Cotton futures fell to a one-week low on Friday as investors tried to gauge the coronavirus epidemic's impact on China's economy, with cases continuing to mount.

 

Cotton contracts for March settled down 0.34 cent, or 0.5%, at 67.41 cents per lb, having earlier hit 67.21, their lowest since February 7. Prices were down about 0.5% for the week. Total futures market volume fell by 21,081 to 39,696 lots. Data showed total open interest fell 2,842 to 217,468 contracts in the previous session.

February 15, 2020

Volume of business improves on cotton market.

Volume of business went up on the cotton market on Friday during the trading session, dealer said.

The official spot rate was at Rs9100, they added. In the ready session, 3600 bales of cotton from Rahim Yar Khan and Sadiqabad change hands between Rs9000-Rs9200, they said.

 

Rate of seed cotton per 40kg in Sindh low quality was at Rs2800, while the best quality was unchanged at Rs4100, and in the Punjab prices of low quality were at Rs2800 while the fine type was available at Rs4600, they said.

 

In Sindh, Binola prices per maund were at Rs1400-1800, in the Punjab rates were at Rs1650-1800, they said and the rate of polyester fibre was at Rs176 per kg, they added.

 

According to the market sources, trading activity improved on the cotton market owing to buying by mills, they said that contracts have been signed to import 48 lacks bales of cotton from other countries.

 

Under the circumstances, the ginners are willing to sell their unsold stock of cotton at the present levels, they said.

 

Reuters adds: Cotton futures fell more than 1% on Thursday after a sharp rise in coronavirus cases in China rekindled fears of its impact on the global economy, overshadowing positive export sales data from the U.S. government.

 

Cotton contracts for March settled down 0.83 cent, or 1.2%, at 67.75 cents per lb. Prices marked their biggest one-day percentage decline since January 31.

 

Total futures market volume fell by 1,995 to 55,557 lots. Data showed total open interest fell 4,300 to 220,310 contracts in the previous session.

February 14, 2020

Slow business activity seen on cotton market.

Thin trading was witnessed on the cotton market on Thursday as sellers were not ready to oblige buyers due to lack of leads, dealers said.

The official spot rate was at Rs9100, they added. In the ready session, only 1000 bales of cotton from Rahim Yar Khan finalised at Rs9500, they said.

 

Rate of seed cotton per 40kg in Sindh low quality was at Rs2800, while the best quality was unchanged at Rs4100, and in the Punjab prices of low quality were at Rs2800 while the fine type was available at Rs4600, they said.

 

In Sindh, Binola prices per maund were at Rs1400-1800, in Punjab rates were at Rs1650-1800, they said and the rate of polyester fibre was at Rs176 per kg, they added.

 

According to reports, the mills were facing financial problems under the circumstances. They said that to deal with the short cotton production locally, growers likely to increase cotton production area, this factor may help in achieving the target.

 

Besides, the cotton growers may start early sowing in Sindh and Punjab, as well, other experts said. The government may cut down sugarcane cultivation area to produce more cotton, they added.

 

Reuters adds: Cotton futures inched up to a more than one-week high on Wednesday as investors were optimistic about the coronavirus epidemic being contained, easing fears of impact to Chinese economy, and the largest consumer of the natural fibre.

 

Cotton contracts for March rose 0.11 cent, or 0.2%, at 68.34 cents per lb by 1:18 p.m. EST (1818 GMT). It traded within a range of 67.77 and 68.55 cents a lb.

 

Total futures market volume fell by 22,729 to 36,184 lots. Data showed total open interest fell 10,791 to 224,610 contracts in the previous session.