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ANALYSIS: pressure continues on cotton prices
LAHORE (March 26 2004): Pressure continued to
mount on cotton prices this week which relented by
Rs 25 to Rs 50 per mound (37.32 kgs) in the ready
market. Turnover remained low but some sources say
that several thousand bales are sold daily but are
not all being reported or recorded.
This week lint prices of higher grades have
definitely fallen below Rs 3000 per mound (37.32
kgs) which psychological barrier now stands
breached.
The sellers of good styles of lint have been
offering to dispose of their product at Rs 3000
per mound but there appear to be no takers for
this cotton at these levels.
Ginners unsold stocks are variously being
estimated between 1.2 million to 1.3 million
bales.
In the net analysis, this week saw sizeable
declines in the New York cotton futures market
even though some gains were recorded on Wednesday.
Therefore, the overall mood of the domestic cotton
market continues to remain depressed with tendency
to stay easy.
While the earlier assessments had put this years
(2003-2004) cotton production in Pakistan in the
range of 8.5 million to 9.5 million bales, the
output has now turned out to be much higher and is
poised to transgress 10 million domestic size
bales on ex-gin basis.
Though mills consumption this year (2003-2004) is
still projected to be close to a record 12.5
million domestic size bales, decrease in prices of
yarn and other textile goods have also restrained
several millers from overstocking their cotton
inventories.
A considerable amount of leftover lint lying with
the ginners is sa1d to be of relatively lower
quality.
According to trade talk, some mills have also
settled their import bookings of cotton bought
from various origins but these quantities are not
deemed to be very large because good quality
cotton is still needed by the leading spinners to
produce export quality of yarn.
In view of the sagging prices of lint, seed-cotton
(kapas/phutti) prices of leftover stocks such as
those in Umarkot in Sindh or in Haroonabad in the
Punjab also became bearish in Sindh.
The seed-cotton prices on Thursday reportedly
ranged from Rs 850/Rs 900 to Rs 1100 per 40 kgs,
according to quality.
In the Punjab, the seed-cotton prices also
suffered a setback and reportedly ranged from Rs
900 to Rs 1200 per 40 kilogram's.
Besides having acquired about 9.5 million bales
(170 kgs) of cotton from both domestic and foreign
sources till now, mills in Pakistan are projected
to require at least another 3 million bales to
last them out before the advent of the new season
(2004-2005).
Traders in Karachi are guessing that till now the
Pakistani mills have booked anywhere from 1.2
million to 1.3 million bales (170 kgs) for import
since August 2003 from which nearly 800,000 bales
have already arrived here.
The price idea for cotton from Mirpurkhas in Sindh
was reported to be about Rs 2400 per mound (37.32
kgs) without the 15 percent sales tax; in Sanghar,
Shahdadpur or Tando Adam, cotton was being offered
from Rs 2400 to Rs 2600 per mound; cotton in the
Nawabshah district was being quoted from Rs 2700
to Rs 2800 per mound (37.32 kgs) according to the
quality; the price idea for cotton from the
Khairpur district ranged from Rs 2650 to Rs 2800
per mound; in upper Sindh (K-68) cotton was being
quoted from Rs 2650 to Rs 2900 per mound, while
cotton from Punjab was being offered over a wide
price range extending from Rs 2300 to Rs 2950 per
mound depending upon the quality.
In the evening the market condition remained quiet
as mill expressed little interest in buying cotton
at present.
In other cotton news, the Pakistan Cotton Ginners
Association (PCGA) reportedly held a general body
meeting at Multan last Saturday and decided to
oppose the opening of a cotton futures market on
the ground that it is unIslamic.
Courtesy Business Recorder |
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Pakissan.com; Advisory Point
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