960403

Cotton prices touch

Rs 2400 per maund

DR ZAFAR HASSAN

LAHORE: The Karachi cotton market remained mostly closed due to a Mohajir Qaumi Movement (MQM) call to strike on Wednesday, and possibly also to extend to Thursday, if high police officials in Pakistan's premier metropolis and the largest seaport are not arrested at the bid and call of the MQM following alleged "cold blooded murder of six MQM workers in the past 24 hours in fake police encounters." However, relatively large cotton trading activity was conducted in the interior of Punjab and a few stations in Sindh where Punjab styles posted a new high for the 1995-96 season, namely Rs 2400 per maund (37.32 Kgs.)

While the Pakistan textile mills have already picked up more than 7.8 million bales (of 170 Kgs. each) from the current 1995-96 cotton crop and the exporters have shipped out nearly 1.7 million cotton bales from the current crop out of a national lint output of about 10 million bales this season. Cotton prices do not relent and are held tight in the market. As a semblance of normalcy returns to Bangladesh where several months or years of political rivalry between the ruling and opposition parties has wrought economic havoc in that country, several spinners from that country are visiting the Karachi cotton market in a bid to revive their cotton import contracts which were lying unattend for the previous several months.

The Karachi Cotton Association (KCA) spot rates for ready cotton could not be filled on Wednesday due to lack of required attendance of the rates committee. On Wednesday the reports from the interior of Punjab indicated a quantum jump in lint prices prevailing from Rs 2250 to Rs 2400 per maund ex-gin, possibly several transactions being conducted on deferred payment basis. Due to the continuing increase in the domestic lint prices. The spinners are now more and more enquiring for imported cottons, mostly for prompt shipments, and the spares offers for imported cottons are being received from diverse cotton regions of the world like Argentina, India, Zimbabwe, Turkey, Syria, the francophone countries, besides the traditional cotton exporting countries like the CIS. The USA offerings for SM or the SLM grades with a staple length 1-1/16 or 1-2/32 could cost more than one US dollar now on C and F Karachi basis.

Contrasted with Tuesday the rates for lint from lower Sindh and the Khairpur district did not change much on Wednesday, but the price of K-68 variety was fully firm at Rs 2300 per maund, while the Punjab styles found elevated levels. Mostly touching the high price domain stretching from Rs 2300 to Rs 2400 per maund on Wednesday.

Thus, 200 bales of lint from Ghotki are said to have sold at Rs 2300 per maund on Wednesday. In the Punjab, 1000 bales of cotton from Sadiqabad are said to have sold from Rs 2275 to Rs 2300 per maund. Then 730 bales from Rahimyar Khan, 800 bales from Karor Pucca, 1300 bales from Pakpattan and 2000 bales from Nurpur Nauranga, all sold at Rs 2350 per maund each on Wednesday. Later, 400 bales from Okara reportedly sold at Rs 2350 per maund, while 1200 bales from Mailsi are said to have sold at Rs 2375 per maund. One mill-to-mill transaction for 900 cotton of MNH-93 is said to have transpired at Rs 2390 per maund, while 1000 bales from Ahmadpur East is said to have sold at the peak price of Rs 2400 per maund.

With the lint prices ruling between Rs 2300 to Rs 2400 per maund in the Punjab, the cotton ginners could buy seedcotton upto Rs 1000 per maund to meet their parity. Thus, it is reported that considerable amount low-grade seedcotton (Kapas/Phutti) from lower Sindh stations such as Kunri is moving to long distances in the Punjab to ginneries located in Rahimyar Khan, Yazman Mandi, Hasilpur and Sahiwal. The commission agents in Tharparkar are wondering is this seedcotton is being smuggled in from India to be mixed as a filler by the Punjab ginning factories located upcountry in Pakistan, which mixing is bound to reduce the quality and intrinsic worth of our cottons.

The leading USA cotton merchants Old World Industries Inc., from Chicago have intimated that the New York cotton futures market responded to the united States Department of Agriculture (USDA) estimate of planting intentions in the USA for the next 1996-97 cotton crop buy moving higher on Monday. The planting intentions for the 1996 crop were estimated at 15,246.9 million acres, down by 10 percent compared to the previous 1995 season. Thus the May 1996 delivery month price settled at US cents 84.86 per pound on Tuesday (up by 8 points), while the July 1996 delivery month improved to US cents 85.86 per pound (up by 8 points).

Old World Industries have added that India expects another export quota to be released shortly despite reports from the merchants that J-34 styles are shorter than expected. Earlier, export tenders were priced above the international cotton market prices.

Old World Industries Inc. further informed that the Chinese state-owned textile mills continue to report financial problems. The China Daily reports that the nationwide losses are estimated at two billion yuans. Many of the state cotton mills are working with reduced number of shifts.

All over the world, the polyester fibre and filament producers have reported reduced production throughout the second half of 1995. Polyester producers report that at current prices they are not covering their variable costs. Although stocks at the producers have been rising, the pipeline stocks are at moderate levels. After a poor first quarter, producers have reported that the business was picking up in February and March, 1996. They anticipate that the second quarter will be much better than the first quarter.