They said that low supply of cotton was the primary reason behind the rising cotton prices in the local market, as recent rains delayed the picking of Phutti in Sindh and Punjab. "Textile mills have huge demand of raw cotton to meet their export orders, while carry-over stock of cotton is not available in the market, which have created some panic and shortage in the market," they added.
The prices of raw cotton have gone up by Rs 50 per maund to new peak of Rs 3350 per maund on Tuesday as compared to Rs 3,300 per maund being sold previously. In the first session of cotton trading, the prices of cotton touched new peak of Rs 3,325 per maund and in the second half the price of raw cotton reached Rs 3,350 per maund in the domestic market.
Traders said that recent rain had badly hit the cotton crop, as the picking of Phutti had not yet started in the major parts of Sindh and Punjab. They said: " The overall cotton production of the ginning factories stood at 3,000 bales per day against the demand of 5,000 bales, hence the cotton prices shot up in the local market".
The spot rate committee of Karachi Cotton Association (KCA) also raised spot rate of raw cotton by Rs 50 per maund in the wake of increasing prices in the open market. After this upsurge, the spot rate of cotton reached highest-ever price of Rs 3,050 per maund from Rs 3,000 per maund.
"I have bought around 400 bales of raw cotton from a ginning factory of Shahdadpur on the season's highest-ever rate of Rs 3,350 per maund," said leading trader Ghulam Rabbani. Cotton spot rate of Rs 3050 fixed by the KCA was also the highest-ever rate during the last 27 years' trading, he added.
He said that the difference between the new fixed spot rate and ready market rate was about 10 percent, which should be reduced by another five percent. "A deal has been finalised by a ginning factory of Shahdadpur at Rs 3350 per maund (37.24 kilograms) for the sale of 1,400 bales to the mills." confirmed another leading cotton trader Haji Naseem Usman.
Ginning factories have failed to meet the textile mills demand due to delay in the picking of Phutti, which also pushed the prices of the Phutti by Rs 200 per maund to all time high level of Rs 1,600 per maund in the local market, he added
"We are expecting further increase in the cotton prices in the next few days, as the downpour still continues in the different parts of the country," Naseem said. He said that Phutti prices in Punjab also moved to highest-ever price of Rs 1,600 per maund from Rs 1,500 per maund.