20000311

Cotton crop mostly sold out

DR ZAFAR HASSAN

LAHORE: This year's (1999-2000) cotton crop has mostly been sold out with ginners carrying less than 700,000 bales (170 kgs) of cotton on their records. Mills have reportedly lifted nearly 8.1 million bales, while the Trading Corporation of Pakistan (TCP) and the exporters have procured 525,000 and about 350,000 bales respectively. Thus the buyers have in all picked up nearly 9 million bales from the ginners this season, leaving a smaller quantity of floatin stock in the market.

There will be some activity in the cotton market during the next few days, but it will taper off by the middle of next week ahead of the Eid-ul-Azha holidays next Friday and Saturday. Even trucks required to carry cotton from the ginning factories to the textile mills will be diverted henceforth more and more to lift sacrificial animals from the rural to the urban areas. However, tigthness of cotton supply remains evident as the ginners are not willing to sell want only. They are looking to obtain handsome prices for their cottons.

New York cotton futures also posted further gains on Thursday, increasing the expiring March 2000 delivery settlement rate to US cents 61.01 per pound (up by 51 points), settling the key May 2000 delivery month still higher at US cents 63.01 per pound (up by 22 points). While the July 2000 delivery also perched higher to end the day at US cents 64.11 per pound (up by 19 points). the domestic lint market is continuing to emit strong signals due to persistent demand of the spinners following buillishness being reported from the yarn markets. The ever-escalating New York coton futures prices are also bestowing a positive influence on the lint vlaues in Pakistan. Though Pakistan has reaped a bumper crop of nearly 10 million bales of cotton this year on an ex-gin basis, but the export possibility of nearly one million bales (170 kgs) this season (1999-2000) is exerting a positive influence on the lint prices. Lint prics are expected to escalate further after the Eid period during the third week of this month and thereafter.

Sowing for the new crop (2000-2001) which normally should be in full siwing by mid-March is likely to be delayed by a few weeks due to delay in water arrival in the Nara and Mithrao canals, thus possibly postponing the cotton plantation in such areas as Kunri Samaro Road, Naokot, Umarkot and Jhudo. However, generally the growers intend to plant cotton on a satisfactory scale for the new crop.

In the meantime, according to reports received from Islamabad, the cotton policy for the incoming 2000-2001 season will be postponed by the government by about one week and is now likely to be announced on the March 21, 2000. The new cotton policy is expected to be a grower-friendly policy which should give boost to cotton production during the next season. Government has apparently postponed the announcement of the new cotton policy to avail more time to consult with the various cotton sectors in formulating the policy.

An estimated 8,000 bales business reportedly took place in the cotton market on Friday. Without the 15 percent sales tax, the price idea for cotton from Mirpurkhas in Sindh was reported to be Rs. 1,750 per maund, that in Shahdadpur and Sanghar ranged from Rs. 1,825 to Rs. 1,850 per maund (37.32 kgs), 200 bales from Nawabshah sold at Rs. 1,850 per maund. The price idea for cotton from the Khairpur district reportedly ranged from Rs. 1,900 to rs. 1,925 per maund, while 4,000 bales from Khanpur Mehar, Daharki. Ghotki and Mirpur Mathelo in Upper Sindh (K-68) are said to have been sold at Rs. 2,000 per maund.

Without the sales tax, the price idea for cotton from the Punjab generally ranged from Rs. 1,900 to Rs. 2,100 per maund (37.31 kgs). About 400 bales of cotton from Harunabad were bought by the mills at Rs. 2000 per maund, while exporters picked up 500 bales of cotton from Harunabad at Rs. 2,025 per maund. Prices of cotton were well maintained in the evening after gaining Rs. 50 to Rs. 100 per maund during this week. Though the Karachi Cotton Association (KCA) kept the spot rate of Niab-78 unchanged at Rs. 2,110 per maund including the 15 percent sales tax, it increased the spot rate of K-68 by Rs. 28.75, per maund to Rs. 2,282.50 per maund and also increased the spot rate of MNH-93 by Rs. 28.75 per maund to Rs. 2321.25 per maund.