Uncertainty looms over cotton supplies
Activity in cotton exchanges has declined while the extent of damage to cotton crops is still largely unknown.
KARACHI:
Activity in the country’s cotton exchanges has declined while the extent of damage to cotton crops is still largely unknown.
The Punjab government has estimated that about 1.5 million bales have been destroyed in the province because of the floods.
Meanwhile, independent estimates of the devastation caused in Sindh claim that as many as one million bales of cotton may have been destroyed – although some dealers claim the final figure will be lower.
“Floods are now devastating Thatta and Badin districts which are major areas for cotton cultivation in the province,” said Ayub Usman, CEO of Usman Cotton Company. “If the damage is not contained we could see further losses in Sindh,” he warned.
Cotton prices remained volatile in the outgoing week but rates fell by about Rs300 towards the end of the week due to a drop in activity. By Friday, spot rates in Punjab settled at Rs6,450 per maund and Rs6,300 in Sindh.
Traders highlighted that the open market rates in Punjab also fell from Rs7,100 at the start of the week to Rs6,800 per maund on Friday. Similarly, in Sindh the open market rates settled at Rs6,500.
Dealers asserted that better estimates will be available regarding the extent of losses after Eid holidays. Transport routes are also expected to become more accessible by then.
Market sources pointed out that Indian exporters have been allocated an export quota of 5.7 million bales by their government, compared to 7 million bales allowed last year.
Published in The Express Tribune, August 29th, 2010.
Activity in the country’s cotton exchanges has declined while the extent of damage to cotton crops is still largely unknown.
The Punjab government has estimated that about 1.5 million bales have been destroyed in the province because of the floods.
Meanwhile, independent estimates of the devastation caused in Sindh claim that as many as one million bales of cotton may have been destroyed – although some dealers claim the final figure will be lower.
“Floods are now devastating Thatta and Badin districts which are major areas for cotton cultivation in the province,” said Ayub Usman, CEO of Usman Cotton Company. “If the damage is not contained we could see further losses in Sindh,” he warned.
Cotton prices remained volatile in the outgoing week but rates fell by about Rs300 towards the end of the week due to a drop in activity. By Friday, spot rates in Punjab settled at Rs6,450 per maund and Rs6,300 in Sindh.
Traders highlighted that the open market rates in Punjab also fell from Rs7,100 at the start of the week to Rs6,800 per maund on Friday. Similarly, in Sindh the open market rates settled at Rs6,500.
Dealers asserted that better estimates will be available regarding the extent of losses after Eid holidays. Transport routes are also expected to become more accessible by then.
Market sources pointed out that Indian exporters have been allocated an export quota of 5.7 million bales by their government, compared to 7 million bales allowed last year.
Published in The Express Tribune, August 29th, 2010.