|
ANALYSIS: prices firm up in cotton
market
LAHORE: Prices of ready cotton have firmed up within this
fortnight primarily due to exporters entry in the market
coupled with a positive purchasing stance displayed by the
Trading Corporation of Pakistan (TCP). Domestic mills are
also buying regularly as both the prices and quality of
Pakistan cotton at this stage is quite attractive for the
buyers.
After a meeting with chairman Masood Alam Rizvi and other
officials of the Trading Corporation of Pakistan in Multan,
Haji Mohammad Ebrahim, chairman of the Pakistan Cotton
Ginners Association (PCGA), has stated that the TCP has
decided to remain in the market to support the price of
seedcotton (kapas/phutti) which have been declared at Rs 925
per 40 kgs, which converts to Rs 2159 per maund (37.32 kgs)
of lint of grade 3 having a length of 1-1/32 of an inch with
a micronaire range of 3.8 to 4.9 with moisture not exceeding
8.5 percent.
Haji Ebrahim added that premia and discount will be applied
for different grades of cotton which are better or lower
than the grade 3 cotton.
Market sources indicate that the TCP may have purchased upto
200,000 bales till now and has declared its willingness to
lift more cotton to support the prices at the level declared
by the government.
With increase in purchases of cotton by the exporters, the
TCP and also the mills, lint prices increased by Rs 25 to Rs
50 per maund (37.32 kgs) on Thursday.
Leading exporters like Haji Khuda Bux, Dadasons, Rehmoumer,
Naseem Enterprises, Hakimuddin Hormusji, Meezan Enterprises,
Cargil and Haji Dossa have reportedly been active in recent
weeks.
Most estimates continue to place the current crop
(2004-2005) output in Pakistan to be around 13 million
domestic size bales on ex-gin basis due to ideal weather
conditions and higher prices of seedcotton the growers
received during the previous season (2003-2004).
The prices of seedcotton also went up by Rs 25 to Rs 50 per
40 kilograms on Thursday. In Sindh the prices of seedcotton
reportedly ranged from Rs 800 to Rs 875/ Rs 900 per 40 kgs
as per quality, while in the Punjab the prices of seedcotton
were said to have ranged from Rs 850 to Rs 900 per 40
kilograms.
Both the mills and the exporters have set their target
purchase price at Rs 1950 per maund (37.32 kgs).
Though some areas in Punjab are reporting approach of army
worms and redenning of the leaves following the recent
rains, but overall the quality of cotton in both Sindh and
Punjab is said to be of fair to good condition.
An estimated 100,000 bales are now reportedly being ginned
daily but this speed could slow down with the commencement
of the holy month of Ramazan within a couple of days.
On Thursday, 200 bales from Tando Adam in Sindh reportedly
sold at Rs 1890 per maund (37.32 kgs), while another 200
bales from the same station were said to have been sold at
Rs 1900 per maund; 400 bales from Nawabshah sold at Rs 1900
per maund while 1000 bales from the Khairpur district sold
at Rs 1950 per maund. In the Punjab 200 bales from Gojra and
400 bales each from Muridwalla and Harunabad sold at Rs 1975
per maund, while 200 bales from Gojra also sold at Rs 2000
per maund. The tone of cotton price continued to remain
steady through the evening.
While the global cotton supply situation remains over all
bearish, both domestic and foreign buyers see the current
cotton prices in Pakistan to be attractive. with mills in
Pakistan poised to consume 13 or more mill on domestic size
bales during the current season (2004-2005), it seems likely
that most of the cotton output in Pakistan should be
disposed off in due course of time.
According to the monthly supply and demand report issued by
the United States Department of Agriculture (USDA) on last
Tuesday, the global output of cotton during the current
season (2004-2005) has risen to a gargantuan 109.67 million
bales (480 lbs) which has increased from last months figure
of 107.25 million bales.
Similarly, the estimate of cotton production in the United
States of America (USA) has also been elevated to a record
21.54 million bales compared to last month's estimate of
20.9 million bales. Global cotton consumption this year has
been hiked to 101.40 million bales.
Major increases in cotton production are construed to occur
in India, the United States, Pakistan and Turkey. On the
face of it, such increased output should weigh heavily on
cotton prices eagerly in search for consumers, but low
prices could conceivably create a good demand for the silver
fibre.
Business Recorder
|
Pakissan.com;
|
