950809

Cotton prices steady

at the weekend

DR ZAFAR HASSAN

KARACHI: As we approach the weekend with certain holidays ahead of us, raw cotton prices moved upwards from Rs 1650 three days ago to Rs 1875 or Rs 1900 per maund on Wednesday afternoon. New Crop (1995-96) lint prices generally ranged from Rs 1825 to Rs 1875 per maund, but some of these prices included concessionary rates offered by the ginners to the textile mills to motivate the mills to lift the cotton they had bought at higher prices a few days ago from the cotton ginners.

Generally, the cotton prices for the new crop (1995-96) were pegged mostly at Rs 1875 per maund on Wednesday evening.

In individual transactions, Mirpurkhas cotton sold variously during the day at Rs 1900, Rs 1850 and Rs 1825 per maund. On the other hand, Tando Allahyar style fetched Rs 1875 per maund. However, a cotton ginner from Sahiwal in Punjab claimed to have sold his new crop cotton (ginned from seed-cotton from lower Sindh) at Rs 1960 per maund. Current crop (1994-95) lint from Rahimyarkhan sold at Rs 1800 per maund, while that from Nawabshah sold at Rs 1900 per maund.

The recent sale of imported CIS cotton by the Cotton Export Corporation (CEC) also influenced to moderate the prices of cotton on the lower side, much to the advantage of the domestic textile mills. Later news also indicated that current crop (1994-95) cotton from Moro and also from Khairpur sold at Rs 1940 per maund each.

Domestic textile industry continues to remain in a difficult situation. One mill claimed to have disposed its 20/1 cotton yarn at US$ 490 per 400 pounds, a relatively low figure. In local sales, one good mill sold its 16/1 cotton yarn at Rs 350 per 10 lbs. Two different spinning units are said to have sold their 20/1 cotton yarn at Rs 360 and Rs 372 per 10 pounds in the local market. One prominent spinner with units in both Kotri and in the Punjab is said to have sold his 30/1 cotton yarn at Rs 417 per ten pounds in the local market.

The overall new crop (1995-96) production prospects in Pakistan remain good, estimated to range from 10.0 to 11.0 million bales (of 170 Kgs. each). Even if the domestic mills in Pakistan consume 8.5 million bales of raw cotton next season (1995-96), an exportable surplus ranging from 1.5 to 2.0 million bales may become available, provided the weather remains conducive and the pests remain under control.

On the international front, any new direction in New York cotton futures, or the determination of lint values for the next season (1995-96), would be influenced by the first objective forecast of the 1995/96 US cotton crop on Thursday (August 10, 1995). In continental and other Far East markets, seasonal and holiday influences have resulted in lower volume of lint trading in most cotton centres. Textile markets continue to remain dull in most world markets, including Japan, South Korea, Taiwan, Thailand, Malaysia and in the Russian rupublic. Even the United States textile industry is not doing so well since the past few months.