KARACHI: Cotton prices surged to an all-time high of Rs6,950 per maund (37.324 kg) as slow pace of arrival of new crop could not meet the needs of ginning mills, dealers said.
“Mills have a high appetite which cannot be met with the flow of cotton from farms. It is trickling in at a slow pace,” said Younus Khan, a cotton broker in Karachi.
He said the price increase is a normal phenomenon which usually happens at the start of the season. The situation in market becomes smooth as harvest gains pace.
Some ginning mills purchase cotton at high rates and instead of processing, they sell the same to other mills at a much higher price, he said.
Khan said global cotton market has an impact on domestic market where prices are also on the rise.
“China has a huge demand and it is affecting world markets.”
In the New York cotton market, July contracts gained 0.42 cent to 81.64 cents per pound on Friday.
So far, Khan said, 30,000 bales of the new crop have reached ginning factories, adding this is for the first time in the country’s history that the crop is coming in the month of June. “Normally, new crop comes into the market in July. First, Sindh crop arrives and then in late July Punjab variety reaches the market,” he said.
According to experts, the country will produce more than 15 million bales of cotton this season provided that monsoon rains are normal and there are no significant disease attacks.
On Saturday, 1,900 bales of cotton were sold in the market at prices ranging from Rs6,800 to Rs6,950 per maund.
Published in the Express Tribune, July 4th, 2010.
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