Cotton price soars KARACHI: Cotton prices soared to a new high level on Friday on short supply of phutti (seed cotton) and rising demand from spinners.
Reports of rains in most cotton-growing areas in Punjab and Sindh triggered panic buying. But the trading volume remained slow and restricted due to short supply.
The domestic market was also influenced by global trend where most major cotton markets remained bullish. The New York market gained over two US cents per lb for October 2016 contract.
Moreover, spinners are reluctant to buy at this stage as moisture content in phutti after downpour has resulted in low quality of lint.
However, high demand from some needy spinners pushed prices to a seasonal high of Rs7,040 per maund (around 38 kilograms). But short supply of quality cotton kept the proceedings devoid of much needed activity.
According to figures recently released by the textile commissioner, cotton consumption was around 14.42 million bales during August 2015 to May 2016. Similarly, spinners put consumption of cotton in June 2016 at 1.4m bales.
Cotton analyst Naseem Usman contested these figures, saying that if this data was correct then why All Pakistan Textile Mills Association kept claiming that the industry was running under capacity due to high cost of doing business and power crisis.
The Karachi Cotton Association increased its spot rates by Rs250, to Rs6,650 per maund.
Major deals on the ready counter were: 200 bales from Mirpurkhas (at Rs6,790 per maund), 200 bales Sanghar (Rs6,800), 100 bales Chichawatni (Rs7,000), 200 bales Gojra (Rs7,025) and 100 bales Haroonabad (Rs7,040).