ISLAMABAD – Cotton prices plunged by Rs600 per maund in Punjab on Tuesday mainly due to late operations of ginning factories.
The rate of phutti, has lowered from Rs4300 per maund to Rs3600, in last two weeks, when cotton picking season started, said Rao Afsar, a representative of small farmers association. He said cotton rates have witnessed fall in trading.
According to cotton brokers, the export of cotton yarn has shrunk up to 65 per cent in recent days, while the rate of polyster fiber is up. The insiders believe dollar increase against rupee is one of the major factors behind rapid decline in cotton prices and instant increase in the price of polyester fibre.
The cotton crop this year is expected to be more as compare to last year. The government is hopeful to achieve production of 10 million cotton bales from Punjab alone, this year.
Farmers and ginners are however, expecting cotton production of around 11 million bales against the official target of over 14 million due to poor farm inputs, including poor quality seed, late sowing and severe shortage of water.
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According to Pakistan Central Cotton Committee data, the cotton sowing target of 2.95 million hectares has already been missed by around 10 percent as only 2.66 hectares could be utilized for cotton.
According to officials, China has sold 10,400 tonnes of cotton at auction of state reserves at an average price of 15,129 yuan ($2,219.50) per tonne, last week, which may affect the overall cotton market and may bring down the prices.
According to United States Department of Agriculture estimates production of cotton would be more as compared to consumption. Gap in demand and supply may decline the prices further in local market in coming days.
The Karachi Cotton Association spot rates have reduced by Rs200 per maund.