In the local cotton market partial trading was started after long Eidul Azha holidays. The needy mills took interest in trading while ginners had stocked the Phutti before the starting of Eidul Azha holidays and they had started making bales before Eid. Due to holidays new picking was not started but now snatchers has started picking. It is hoped that by Monday or Tuesday markets and businesses will be fully operational.
If there will be no rains then up till now only the quality of cotton was affected due to the recent last rains but there is no information regarding decreasing of production however there may be some damage due to rains but in some areas the rains are beneficial for the cotton crop. However according to the estimates of the expert one crore 25 lac cotton bales will be produced.
The price of cotton in Sindh is in between Rs 7650 to Rs 7750 per maund. However according to the information the rate of Phutti which was affected by rain is in between Rs 3000 to Rs 3300 per 40 kg. In Punjab the price of cotton is in between Rs 7900 to Rs 8000 per maund while the rate of Phutti is in between Rs 3500 to Rs 3800 per 40 kg while the rate of Phutti in Balochistan is in between Rs 3500 to Rs 3600. The Spot Rate Committee of Karachi Cotton Association has stabled the rate of cotton at Rs 7750 per maund.
Chairman Karachi Cotton Brokers Forum Naseem Usman told that during the last week in the international market there were news regarding cotton. According to the report released the other day the American cotton sale was 3,29,100 (three lac twenty nine thousand and one hundred) bales which is 83 percent more as compared to last week while the export remained 2,74,200 (two lac seventy four thousand and two hundred) bales. China had not taken interest in buying and cancelled orders of 13,300 (thirteen thousand and three hundred) bales; which can be the cause of bearish trend in coming days.
According to the monthly report of World wide cotton production there is an increase of 2,05,000 (two lac five thousand) bales in the production of American cotton and 22.52 million bales were produced which is at highest point in last 14 years. According to the experts the production increased due to the increase in cultivation area.
According to second report production of cotton crop in the world as compared to last week decreased by one lac 80 thousand bales and it remained 125.61 million bales which is 0.14 percent less as compared to last week. The demand of cotton is decreased by 12 lac bales and it remained at 123.07 million bales which is 0.9 percent less. The report also pointed out decrease in the demand of China, India and Uzbekistan.
According to the experts despite the decrease of 18 lac bales in the overall world production the increase of 10 lac bales in the opening stock is witnessed and demand decreases by 12 lac bales which can bring bearish trend in market. The market can be in pressure in the coming days because there is no big buyer in the market and the American cotton production is at highest point as compared to last 14 years.
Moreover, in America and China trade conflict America had differed the imposition of 10 percent tariff on import from China due to which the rate of New York Cotton increased. The second reason behind the increase in the rate of New York Cotton is USDA report in which the export of American cotton is more as compared to last week. The prices of cotton remained stable in China. The increasing trend was seen in the prices of cotton in India. There is overall slump in the local textile sector. The ban on import from India can affect the local cotton market.