960407

Clear contours of cotton crop now available

DR ZAFAR HASSAN

LAHORE: Clearer contours of the current 1995-96 cotton crop production and disposal pattern have now emerged. Out of a production estimate of 10 million bales (of 170 Kgs. each) for this year's cotton crop in Pakistan, the domestic spinning mills have lifted nearly 8 million bales upto date, while the exporters have lifted an estimated 1.5 million bales, leaving approximately half a million bales of unsold cotton stocks with the ginners.

Generally speaking, Sindh styles are being quoted from Rs. 2200 to Rs. 2250 for lint qualities available from the lower to the central parts of the province. However, lint from Upper Sindh comprising the K-68 variety is priced upto Rs. 2325 per maund. In the Punjab, the price range for cottons extends roughly from Rs. 2275 to Rs. 2400 per maund, while a few of the ginners are also quoting nothing less than Rs. 2450 per maund. It is interesting to note, however, that some cotton exporters have turned into sellers in the domestic market, presumably to offload their lint stocks which they had purchased earlier to ship it to Bangladesh or other destinations. Thus it appears obvious that lint prices, at least for the choice lots, are likely to remain firm for the remainder of the season.

Some of the Pakistani spinners are said to have recently approached the Indian cotton exporters in a joint and collective effort to import lint from that region, but the private cotton exporters in India are said to have exhausted their cotton export quotas, and thus have apparently nothing to sell. It is also now entering the minds of the Pakistani spinners that with the New York cotton futures having shot up to within a close distance to US cents 90 per pound, importing cotton from various sources like the CIS, USA, Turkey, Greece, Syria, or Zimbabwe for the matter, can be an expensive undertaking.

However, the cotton yarn prices in Pakistan, and for Pakistani yarns in the exports markets, is said to be firm. With the global increase in lint prices, the recent devaluation of the Pakistan Rupee, and also hopefully with the increase of the price of 20/1 Pakistani cotton yarn from US dollars 525 or 550 to US$ 575 or 600 per 400 lbs., the domestic mills may attain their hitherto elusive parties, and also resore their viabilities in the process. However, the massive losses incurred by the Pakistan spinning industry over the past three years may need more time to obliterate from our memories and calculations.

Then there are the 5,000 or 6,000 bales of unsold cotton supposed to be lying with the Cotton Export Corporation (CEC), the sale of which may assist in tempering the lint price increase in a minor way. It is too late to recall that the CEC has already exported nearly 30,000 bales of cotton at an estimated price of US cents 80 per pound some time back, which it had reportedly imported from Turkmenistan during the previous season.

In actual physical cotton transactions on Sunday, 270 bales from Shahdadpur were said to have sold at Rs. 2200 per maund. The price idea for lint from Khairpur was given to range from Rs. 2225 to Rs. 2250 per maund till Sunday afternoon, while the price for K-68 variety was quoted upto Rs. 2325 per maund.

In the Punjab, 1600 bales from Bahawalpur are said to have sold from Rs. 2270 to Rs. 2300 per maund on Sunday. However, 1200 bales from Multan are said to have been disposed at Rs. 2300 per maund, while 3,500 bales from Khanpur reportedly fetched Rs. 2370 per maund. Furthermore, some very high quality of lint from Qutubpur totalling 1200 bales is said to have been sold via an intermediary/investor/commission agent at Rs. 2400 per maund. Thus moderate volume of lint sales were reported in a tight lint market till Sunday afternoon.

Later in the evening, however, some export quality lint from the Central Sindh stations like Khadro (Sanghar district), Mehrabpur and Bhiria City (Nawabshah district), Kot Diji and Subadero (Khairpur district) was sold at Rs. 2250 per maund on ex-Karachi basis. A few textile mills also called up the cotton brokers to offer some of their cottons in stock for sale in the open market. There were also reports in the market that an exporter had sold 600 bales of MNH-93 cotton at Rs. 2300 per maund on ex-Karachi basis.

The Karachi Cotton Association (KCA) spot rates were again increased in all the varieties on Sunday. Thus the spot rate for Niab-78 was increased by Rs. 25 per maund compared to Saturday to Rs. 2185 per maund, that of K-68 by Rs. 25 per maund to Rs. 2320 per maund, and that of MNH-93 by Rs. 10 per maund to Rs. 2350 per maund.

While the total cotton export registrations with the Export Promotion Bureau (EPB) remained unchanged on the 4th of April, 1996 at 2,313,208 bales (of 170 Kgs. each), the actual shipments of the 1995-96 cotton crop from Pakistan increased to 1,706,318 bales upto the 4th of April 1996.