Textile millers are scrambling to strike import deals with cotton-producing countries following a steady increase in prices of cotton in the domestic market.
According to market people, in the last two days, the price of cotton has jumped Rs200 to Rs6,200 per maund in the local market and raw cotton (phutti) has become dearer by Rs300 to Rs3,000 per maund.
“It is expected that this upward trend in cotton prices will continue for the next few days,” a dealer said.
Talking to The Express Tribune, Pakistan Cotton Ginners Association’s former executive member Ihsan-ul-Haq said the textile millers seemed to be in a hurry to enter into cotton import agreements with Brazil, Greece, West Africa and India following a continuous rise in cotton prices in the domestic market.
Reports of lower-than-expected cotton crop in Pakistan and India, a rise in the value of dollar against Pakistani rupee and Chinese intention to buy cotton yarn from Pakistan in a big way have positively impacted cotton prices in the local market.
Haq said earlier estimates put Pakistan’s cotton crop at 15 million bales this season, but adverse climatic conditions and a decrease in cultivated area brought down the forecast to 13.5-14 million bales.
In India, the supply of cotton from farms stood at 1.3 million bales up to November 4, which was 30% less than supplies made in the corresponding period of last year.
According to a report issued by the Cotton Corporation of India, the major shortfall of up to 40% in cotton production has been recorded in the states of Gujarat, Maharashtra and Madhya Pradesh. In Punjab, Haryana and Rajasthan states, the production shortfall is much smaller at 12%.
Haq said the unexpected decline in Indian cotton production might force Delhi to revise its export policy and ban cotton export, which would further push up cotton prices in Pakistan and the world market. Last week, cotton prices rose by Rs500 per maund in Pakistan’s market.
Published in The Express Tribune, November 8th, 2012.
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