950828

ANALYSIS

Cotton prices

move up again

DR ZAFAR HASSAN

KARACHI: In a market prone to abnormal fluctuations in lint prices for the ready cotton for the new crop (1995-96), sales values of Sindh styles moved up again from Rs 1950 to Rs 2075 or even Rs 2100 per maund on Monday as about a thousand bales changed hands by the afternoon. Thus lint prices fell and then rose again by about Rs 125 to Rs 150 per maund within two or three days. The priceline for lint trading in the ready market is very erratic.

New crop styles from Sindh reportedly traded on Monday from Rs 2050 to Rs 2100 per maund. Hyderabad station sold its cotton at Rs 2050 per maund. Mirpurkhas and Tando Allahyar lint sold at Rs 2075 per maund each. However, cottons from Oderolal, Shahdadpur and also a lot from Mirpurkhas also fetched Rs 2100 per maund. Later in the afternoon, cotton ginners were generally sellers at Rs 2100 per maund. The reason put forward for this rebound in lint values is said to be less arrival of seed-cotton (kapas) into the ginning factories.

There is no real shortage perceivable of seed-cotton arrivals at this time of the season (1995-96) compared to last year, perhaps the only cause of tightness is due to seed-cotton. Being more widely distributed or scattered among more and more eager ginning factories who want to procure the commodity. Indeed, according to one reckoning, about 70,000 more pressed (ginned) bales have arrived this year into the market upto now as compared to last year. Most cotton traders still harbour the hope of achieving a national lint output of 10 million or more bales (of 170 kgs each) for the forthcoming cotton season (1995-96) in Pakistan.

Seed-cotton (kapas) prices are also moving up and down rather erratically. On Monday seed-cotton values reportedly ranged from Rs 825 to Rs 840 per 40 kgs. The prices for cotton-seed (binola) were said to range from Rs 235 to Rs 240 per maund. Three hundred bales of current crop (1994-95) of K-68 variety is said to have been sold by an exporter to a mill at Rs 2000 per maund on ex-Faisalabad basis

There were rumours in the cotton market that upto 30,000 bales (of 170 kgs each) of new crop (1995-96) cotton has already been sold for export from Pakistan upto this time with prices ranging from US cents 74 to cents 84 per pound on C and F basis. Destinations are said to include Hong Kong, Singapore, Bangladesh and the Philippines. However, sources close to the Karachi Cotton Association (KCA) have discounted sales of such large quantities of cotton for export and feel that at the most only about 4,000 to 5,000 bales of new crop Pakistani cotton may have been committed for export for September/October 1995 shipments.

The tone of the cotton market remained quite steady on Monday. The textile mills lifted most of the cotton lots purchased by them in the market as they are mostly devoid of stocks in their godowns, but a few ginners were reported to be procrastinating in cotton deliveries against recent sales, presumably due to relative tightness of supplies.