Cotton hits all-time high

KARACHI: The spot rate for cotton rose to record levels on Wednesday because of slow domestic supply and surging prices in the international market.

“The price quoted by the spot rate committee that is used for obtaining financing from financial institutions reached Rs8,500 per maund (37.324 kg),” said cotton analyst Shakeel Ahmed.

“The previous high was Rs8,300 but this was crossed after the rate jumped by Rs200 during trade on Wednesday.” Market sources also revealed that the open market rate for cotton has also risen to unprecedented levels. In Punjab and Sindh, cotton was sold for Rs9,000 per maund while phutti (seed cotton) price touched Rs4,300 per maund.

Experts explained that the supply of cotton has dropped, driving prices higher. A recently released report of the Pakistan Cotton Ginners Association showed that the supply of cotton has dropped by 130,000 bales by October,compared with the same period last year.

International cotton prices have also surged in recent days. Additionally, local importers have asserted that orders that were placed with Indian cotton exporters have not been delivered and they are demanding higher rates for their produce.

Due to these factors, market participants are anticipating cotton prices to trend higher in upcoming trading sessions.

Published in The Express Tribune, November 4^th, 2010.