Raw cotton hits all-time high of Rs12,000 per maund

KARACHI: Raw cotton skyrocketted by Rs1,000 to hit an all-time high of Rs12,000 per maund on Friday amid short supply in the local market and a significant rise in the international market following unclear policy over cotton exports from India, dealers said.
“There are multiple reasons, which boosted commodity prices to a new high.”
Tight supply prompted buyers to lift cotton at higher prices in the local and international markets as cotton season 2010/11 is near completion in Pakistan,” said Dr Mohammad Ali Talpur, Director Marketing and Economic Research, Pakistan Central Cotton Committee, the Ministry of Food and Agriculture.
“And India has an unclear policy about its cotton exports, despite bumper crop.”
Ginners from Rahim Yar Khan, Chichawatni and Ghotki sold 3,000 bales of raw cotton at the highest level of Rs12,000 per maund on credit, surpassing the previous record of Rs11,800 per maund on credit on January 25.
Spot rate of the Karachi Cotton Association (KCA) increased by Rs200 to hit a record high of Rs10,800 per maund for average-quality lint, breaking the previous record of Rs10,600 per maund on January 25.
Seedcotton (Phutti) rose by Rs300 to peak at Rs5,200 per 40kg, surpassing the previous record of Rs4,900 per 40kg on November 10, 2010.
“Low quality cotton is selling in the range of Rs11,000 and Rs11,500 per maund in the country, while a number of deals of seedcotton were reported in the range of Rs4,700 and Rs5,200 per 40kg, depending upon the quality produce.”
Raw cotton for March and May contracts rose by 2.56 cents and 4.10 cents to touch the highest level of $1.69 and $1.63 per pound, respectively, breaking the peak level of Thursday, at the International Commodity Exchange (ICE), New York, while whetting appetite for the commodity.
Ayub Usman, a Faisalabad-based cotton consultant, predicted that prices at the ICE and the KCE would edge higher due to healthy demand for the ginned cotton in the world.
He told The News that cotton imports could rise as floods damaged two million cotton bales in Pakistan and thousands of bales in China and Australia, while boosting prices and imports.
“Around 300 out of 1,212 ginning factories in the country have been working and producing around 60,000 bales of cotton daily, but the supply remains tight due to an acute shortage of the commodity and demand is on the rise,” said Shakeel Ahmad, a leading cotton trader at the Karachi Cotton Exchange (KCE).
Meanwhile, the country’s cotton sales swelled to 20,100 bales of raw cotton (170kg each), including 1,600 bales from Bahawalpur; 2,200 bales from Sadiqabad; 1,000 bales each from Rahim Yar Khan, Chichawatni and Hasilpur; 1,100 bales from Lodhran; 800 bales from Ahmadpur; 400 bales each from Bahawalnagar, Sardar Garh, Mianwali, Shujabad, Rajanpur, Mian Channu, Layyah, Haroonabad and Burewala, varying in between Rs10,350 and Rs12,000 per maund, another 12,00 bales from Bahawalpur at Rs11,650 per maund on credit, 1,600 bales from Khairpur; 1,000 bales from Mirpurkhas; and 2,000 bales each from Daharki and Ghotki, ranging in between Rs11,200 and Rs11,800 per maund.

(Source: http://www.thenews.com.pk/TodaysPrintDetail.aspx?ID=28173&Cat=3&dt=1/29/2011)