* Textile and spinning sectors face shortfall of 2.5m bales
By Razi Syed
KARACHI: The increasing cotton prices hit a historic level when the physical business took place at Rs 5,050 per maund on Wednesday.
“Due to shortfall of around 2.5 million bales, the textile and spinning sectors are eager to consolidate their long positions in order to minimise the export price, which is rising on increasing dollar,” an expert on cotton at Drachenberg in Lubbock, Texas Fazal Ahmad Khilji said.
Deals on three-month delivery period matured above physical prices in Sindh while fine lint remained in focus, he added.
The spot rate of the Karachi Cotton Association (KCA) settled at Rs 3,200 on the January 1, 2009 and on December 31, last trading day of 2009, it was Rs 4,550 per maund, he added.
“The international price index also moved upward despite financial depression and worldwide short crop in 2009.”
In the international market the lint price was 58.11 cents per pound and on December 2009 the price was quoted at 75.43 cents per pound, he added.
The Cotlook A Index was at 57.40 cents per pound on January 2, 2009 and on December 31, it was quoted at 78.45 cents per pound in UK, Khilji said. “At Cotlook there is a big move that is about 2,105 points.”
“The cotton export from the country witnessed a historic level when it crossed the figure of 695,000 cotton bales, reflecting an increase of 193 percent till December 2009. Cotton was exported to Bangladesh, India, Central Asian Countries and Indonesia,” according to Federal Bureau of Statistics.
According to Pakistan Cotton Ginners Association Wednesday, arrival of lint till February 1, 2010, ginneries received 12,513,230 bales, out of which, textile sector bought 10,907,982 bales while private sector commercial exporters purchased 794,348 bales during the period.
He said during this period the total flow was 273,271 bales against flow of 497,568 bales during same period last year.
He said the export of cotton is likely to touch more than 1 million bales by the end of February 2010, as multinational companies are also active in this trade.
The Pakistan's textile sector will bear a burden of around $650 million on import of cotton from USA, India and Brazil due to decline in cotton yield.
There is no monitoring system introduced to keep an eye on the new seed quality and proper germination and no study has been done before allowing Bt type cotton sowing, regarding the after-effect and behavior of plants of the particular variety's seed, he added.
He emphasised the government to take urgent measures to finalise the matter of BT cotton seed to enable the growers to sow certified quality of Bt cotton seed for higher production.