LAHORE-Business Recorder (August 24 2007): Cotton prices in the ready market have been very prone to fluctuate according to the weather condition, particularly rains which have been falling off and on with interruptions during the past couple of weeks in Sindh.

Both Sindh styles and lint from Punjab lost nearly Rs 125 per maund (37.32 kgs) on Thursday morning compared to the overnight rates. Seedcotton (kapas/phutti) prices also conceded Rs 75 to Rs 100 per 40 kgs upon the perception that rains had ceased in the cotton growing areas in Sindh.
 
Later in the evening, however, with news that fresh rains had fallen in such Sindh stations as Matiari, Tando Adam, Sanghar and Khipro, sellers tried to hold some offers but without much effect.

Sindh styles which were selling between Rs 3,150 to Rs 3,175 per maund (37.32 kgs) on last Wednesday started selling at progressively lower rates on Thursday morning viz. Rs 3,125, Rs 3,100, Rs 3,075 and Rs 3,050 per maund. Punjab lint which was generally selling between Rs 3,250 to Rs 3,300 per maund on last Wednesday started selling decreasingly at lower rates in the afternoon ie Rs 3,125, Rs 3,100, Rs 3,075 and Rs 3,050 per maund.Seedcotton (kapas/phutti) which was selling from Rs 1,375 to Rs 1,410 per 40 kgs on last Wednesday in Sindh sold lower on Thursday between Rs 1,325 to Rs 1,350 per 40 kilogrammes. In the Punjab, seedcotton which was selling between Rs 1,550 to Rs 1,625 per 40 kgs sold lower on Thursday from Rs 1,500 to Rs 1,525 per 40 kilogrammes.
According to one report, about 15,000 to 17,000 bales are now being ginned daily in both Sindh and Punjab. However, cotton prices may only come down when daily output figure goes to 35,000 bales or more which may take another few weeks.

In the evening, though cotton prices started being quoted higher compared to prices prevailing earlier in the day, mills remained cautious buyers as they had covered some of their immediate requirements previously.

Moreover, financial stringency and mostly depressed or uncertain New York futures put mills buying in a cautionary mode.Domestic cotton market is likely to settle down only after another 12 to 15 days when weather vagaries may recede gradually and bring optimism to the crop output numbers. Even up to now, growers remain hopeful that 14 to 15 million bales (170 kgs) may be harvested in Pakistan this season (2007-08).With mills consumption still being projected around 16 million domestic size bales this year, and import of 2 or 3 million bales (170 kgs) or even more remains a veritable possibility.

There is a section of the spinning industry which is fighting for its survival, and also portions of weaving sector are finding it hard to make ends meet because of increased yarn prices, but the bulk of the textile industry is likely to continue with its operations despite the projected adversities.On Thursday, 200 bales of cotton from Sinjhoro in Sindh, 400 bales from Hala, 600 bales from Jhol and 2,000 bales each from Shahdadpur and Tando Adam all reportedly sold at Rs 3,100 per maund (37.32 kgs). Later, 1000 bales each from Hyderabad and Sanghar were said to have been sold at Rs 3,075/Rs 3,100 per maund, while in the evening 400 bales from Shahdadpur also sold at Rs 3,050 per maund.In the Punjab, a sale of 200 bales each from Arifwalla, Bahawalnagar and Chichawatni was reported at Rs 3,150 per maund (37.32 kgs) each. In the evening, cotton brokers said that the market again appeared to have adopted a subdued disposition.

An estimated sale of 6,000 to 7,000 bales took place on Thursday.Other news indicated that due to moderate to medium flooding in the rivers, an additional cotton output estimated from 500,000 to 700,000 bales may be obtained from the riverine areas this season. If the cotton arrivals continue at current pace and the rains do not delay or damage the crop significantly, cotton prices should move downwards.



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