KARACHI: Cotton demand is fast rebounding after easing lockdown as textile companies are abuzz with reviving industrial activities to include Pakistan among the world’s top recipients of foreign orders post shutdown, people familiar with the development said on Saturday.
While textile and spinning mills keep purchasing cotton arrival remains slow due to rainfalls, sending prices up during the start of the week. Later on, however, prices decreased in the market as quality of lint dropped because of rain, traders said.
During the outgoing week, lint prices in Sindh remained at Rs8,200 to Rs8,300 per maund. In Punjab, the prices were in the range of Rs8,550 to Rs8,650, while price was between Rs8,350 to Rs8,375 per maund in Balochistan. Karachi Cotton Association’s spot rate committee increased the spot rate by Rs100 to Rs8,350 per maund.
Karachi Cotton Brokers Association Chairman Naseem Usman said cotton prices remained mixed in the world. Rates varied between 63.50 cents per pound to 61.30 cents per pound in the New York Cotton Market futures. China remained the big buyer of cotton during the week. Stakeholders said if international reports are considered, cotton prices will decline next week. Rain may have a positive impact in some areas in Pakistan and negative effect in others. There is a forecast of more rain in the country. August and September months are called crucial for cotton crop and agriculture departments in the country have asked growers to remain cautious.
Globally, cotton supply is showing an upward trend due to coronavirus-caused decline in consumption and that could be a reason behind price fall, according to the World Agricultural Supply and Demand Estimates (WASDE).
In Pakistan, cotton production might fall in the country due to heavy rains in cotton growing areas of Sindh and Punjab, which might lead local mills to import more lint, said Ihsan ul Haq, chairman of Pakistan Cotton Ginners Association.
Cotton production in the Punjab, the biggest cotton producer, is estimated at around 7.5 million bales of cotton. Last year, cotton sowing in the country declined 18 percent in the country. In Punjab only, cotton sowing decreased 18.16 percent.
World cotton trade slowed down while opening stocks were lower and ending stocks were higher in the world during 2019/20. Cotton consumption declined in the US and China. However, cotton prices remained stable in China and India, which decreased in Brazil and Argentina. Stakeholders said Pakistan’s textile exports can reach to the level of last fiscal year. Pakistan’s textile and clothing exports contracted to $12.5 billion in the fiscal 2019/20 as compared to $13.3 billion in 2018/19.