950807

Cotton market recoups

after heavy fall

last week

DR. ZAFAR HASSAN

KARACHI: The local raw cotton prices recouped by at least Rs 100 to Rs 125 per maund on Monday as Sindh styles from the new crop (1995-96) reportedly sold at Rs 1825 to Rs 1850 per maund, after having fallen from Rs 2200 to Rs 1700 per maund during last week or eight days earlier. Due to increased demand from Punjab spinners, as it is still five to six weeks before the new season starts producing cotton in larger quantities, lint prices improved notably to correct their earlier massive fall, which in retrospect, appears to have been overdone.

In the meantime, prices of seed-cotton (kapas) also registered a gain from about Rs 700 to Rs 750 per 40 kgs on Monday. Consequently, the ginners' offerings for the new crop (1995-96) became steady to tight as prices quoted for new season Niab-78 from lower Sindh moved up to Rs 1850 per maund in the afternoon.

During the last couple of days, new crop styles from lower Sindh sold over a wide range of prices such as Rs 1625, Rs 1650, Rs 1700, Rs 1730, Rs 1750, Rs 1790, Rs 1800 and Rs 1825 per maund. Tando Allahyar new crop sold at Rs 1850 per maund later. Current levels for new crop from Sindh were thus being offered from Rs 1925 to Rs 1850 per maund. Lower lint prices mentioned above only reflect concessions offered by ginners to those mills who had earlier bought lint at high prices.

In the current crop (1994-95), Nawabshah, Kot Lalu and Bhiria city, all sold at Rs 1850 per maund. One exporter reportedly offloaded his current crop lint from Tando Allahyar at Rs 1725 per maund, Shahdadpur at Rs 1750 per maund, and Nawabshah at Rs 1860 per maund.

Now more than twenty ginning factories in Sindh, and couple more in the Punjab province, are ginning the new crop (1995-96) seed-cotton (kapas) from Sindh, producing about 3,000 bales (of 170 Kgs. each) per day. Weather situation at this time is being reported normal in both the Sindh and the Punjab provinces. An estimated two to five percent new crop may have been adversely effected due to high floods in the rivers, but any such loss would be more than compensated due to twenty or thirty percent more sowing of cotton claimed by the growers for the next crop. There is a wide range of estimation for next year's (1995-96) projected lint output in Pakistan, ranging from 10.0 to 11.5 million bales (of 170 Kgs. each).

According to another report in the local cotton market, continous bank closures in Pakistan extending from 10th of August to 14th of August, 1995 due to weekly, festival and national independence day holidays except for 13th August, 1995, have also prompted the domestic spinners to acquire enough cotton stocks to last them well into next week, thus tightening the lint prices.