KARACHI: The unexpected rise in cotton prices during the week has not given any respite as trade is being traded at higher rates during the industrial input season as the gap between supply and demand in local production is widening due to the shortage. ۔
Traders say it was sold during the outgoing week at the highest prices of the current season, while production is expected to be around 6 million bales this year.
The price of Sindh cotton ranged from Rs 10,000 to Rs 10,700 per quintal. Cotton from Punjab sold at Rs 10,200 to Rs 11,000 per head, while lint from Balochistan sold at Rs 10,500 per head.
Naseem Usman, chairman of the Karachi Cotton Brokers Association, said the rise in prices also benefited the international market. In the New York Cotton Futures Market, after closing at 14 cents per pound to 82 cents, prices closed close to 80 cents per pound.
The market remained active in the trade due to the interest of both buyers and sellers. It is hoped that buyers will arrive in stock as the season is expected to be shorter, leading to higher prices.
Cotton production has declined from 15 million bales per annum to 5.5 million bales in recent years.
Due to the rise in cotton yarn prices, towel makers have appealed to the government to ban yarn exports. Value-added exporters also demanded removal of five per cent customs duty on cotton yarn imports.
Textile spinners say declining cotton production in the international market and rising cotton prices have pushed up yarn prices in the domestic market. Textile and spinning mills are operating at full capacity and the demand for import of duty free yarn is not understood.
Textile exports hit a record high of more than 4 1.4 billion in December. The industry has been in turmoil ever since the government decided to manage the spread of the corona virus by avoiding outlook.
The country is receiving export orders from other parts of the world under a complete or partial economic shutdown.
Cotton exports from the United States rose 113 percent during the week. Of these, 152,000 bales were ordered by India, followed by Pakistan at 56,600 bales.
Prices also rose in Brazil, Argentina, Central Asia and India. Cotton production in India is expected to be around 37 million bales. The Cotton Corporation of India has fixed the support price of lint there while the government provides subsidies and incentives to both farmers and ginners.