Raw cotton remains stable

KARACHI: Raw cotton remained steady on Monday amid restricted buying and selling in the domestic market, dealers said.
“Trading at the Karachi Cotton Exchange came to a naught as both buyers and sellers remained on the sidelines due to a continuous fall in the international market and declining stockpiles of the country,” said Naseem Usman, chairman of the Karachi Brokers Forum.
However, Pakistan Cotton Ginners Association (PCGA) reported the country’s stocks at 0.246 million bales of raw cotton, which is insufficient to meet the textile sector needs.
“A total of 38 out of 1,212 ginning factories, two from Sindh and 36 from Punjab are busy in cotton processing and are able to produce 500-1,000 bales of cotton daily due to depleting stocks,” said Usman.
He told The News that India had allowed its traders to export around 720 million kilograms cotton yarn during the season 2010/11, but while seeing higher prices of the commodity and robust demand in the international market, it lifted a ban from the allocated quota.
The policy shift from the Indian government gave a tough time to Pakistani cotton yarn exporters as a variety of 20-double cotton yarn was being priced at $950 a bundle, but now its prices fell to $850 in the commodity importing countries due to improved supply and good quality yarn from India.
However, spot rates at the Karachi Cotton Association (KCA) remained stable at Rs12,500 per maund and 13,396 per 40kg for average-quality lint.
Seedcotton (Phutti) prices varied in between Rs4,000 and Rs5,000 per 40kg in both the cotton growing provinces, Punjab and Sindh. Not a single transaction of raw cotton was reported in the local market.