950812

Cotton market marginally easier

DR. ZAFAR HASSAN

KARACHI: The cotton market prices were marginally easier on Saturday as lint values were lower by Rs 25 to Rs 50 per maund for the new crop (1995-96) styles from lower Sindh. Thus new crop Niab-78 reportedly sold mostly from Rs 1800 to Rs 1825 per maund on Saturday. A pause appeared to have arisen in new crop lint prices which fluctuated violently over the past 10 or 12 days, namely ranging from Rs 2200 to Rs 1650 per maund.

On Saturday, new crop lint from Shahdadpur sold at Rs 1755 per maund. Mirpurkhas lint sold both at Rs 1775 and also at Rs 1800 per maund. However, Sultanabad lint reportedly fetched Rs 1785 per maund. Lint from Sanghar is said to have sold at Rs 1800 per maund on Saturday. However, new crop lint from Sahiwal in the Punjab (ginned from seed-cotton obtained from Sindh) sold from Rs 1875 to Rs 1890 per maund.

No business of current crop (1994-95) was reported till the afternoon. Some spinners are now complaining about the quality of cotton purchased from the Cotton Export Corporation (CEC),but this complaint has to be viewed in a relatively bearish situation now obtaining in the local lint market.

The overall condition of the forthcoming cotton crop (1995-96) is said to be good in both the Sindh and Punjab provinces, still giving rise to production estimates exceeding 10 million bales (of 170 Kgs. each). However, the domestic textile mills are worried about the low level of cotton yarn prices currently obtaining in both the local and the export markets, ranging from Rs 350 to Rs 360 per 10 lbs locally. Some mills have observed that the viability of the spinning industry would only accrue if the raw cotton prices fall to about Rs 1600 per maund or nearabout.

Thus easier sentiment prevailed on the local lint market on Saturday, as the lint prices were barely steady. Some spinners observed that a dose of devaluation of the Pakistan rupee against the US dollar, even on a moderate scale, may given some help to the ailing textile industry in Pakistan, while others may not agree to this prescription. Most textile millers, however, do not foresee any revival of the Pakistan textile industry around the corner. In fact, they insist that having to obtain raw cotton at international prices and also having to pay input prices such as power and bank markup at higher rates, has eroded the viability of the Pakistan textile industry. Some observers fear that any further deterioration of the Pakistan textile industry may even undermine the stability of a sizeable section to the local banking sector.