950816

Local lint fully steady

DR ZAFAR HASSAN

KARACHI: In what appears to be a more demand than supply situation of lint in the local market, the lint prices for the new crop (1995-96) from Sindh are fully steady, ranging from Rs. 1900 to some sales as high as Rs. 1925 per maund on Wednesday. Even the current crop (1994-95) sales were quite respectable, running into several hundred bales of cotton.

Thus on Wednesday over 1,000 bales of new crop lint from Tando Adam, Mirpurkhas, Tando Allahyar, Sanghar, Sultanabad and Oderolal (next Sunday delivery), mostly for ready delivery, sold at Rs. 1900 per maund, Kot Ghulam Mohammad, however, sold at Rs. 1920, and one lot of Mirpurkhas sold later in the evening at Rs. 1925 per maund. The notion with the cotton ginners prevalent in the market was that with cotton price at about Rs. 1900 per maund and 20/1 cotton yarn prices ranging from Rs. 360 to Rs. 370 per 10 pounds in the local market, the spinners should strike a parity in their production costs. New Crop cotton from Sahiwal in the Punjab (ginned from seed-cotton obtained from Sindh) sold at Rs. 1975 per maund on Wednesday.

With seed-cotton (Kapas) prices quoted from Rs. 780 to Rs. 785 per maund for the new crop in Sindh, the ginners reported lint price parity at Rs. 1900 per maund if gained in Sindh, and Rs. 2005 per maund if ginned in the Punjab (as in Sahiwal). The price of seed-cotton latter in the evening was said to have risen to Rs. 790 or Rs. 795 per 40 kgs., which could result in higher lint prices. The price of cotton-seed (Binola/Kakra) in Sindh was said to range from Rs. 245 to Rs. 250 per maund in Sindh and Rs. 275 per maund in the Punjab. The ginners were reported to be fully sold for their nearby cotton deliveries.

In current crop (1994-95) transaction, K-68 lint from Khairpur and Kot Lalu sold at Rs. 1900 per maund for Faisalabad delivery, while Akramabad and Rahimyar Khan cotton sold at Rs. 1840 per maund each. Another cotton sale from Rahimyar Khan was reported at Rs. 1775 per maund. Two hundred bales of MNH-93 from the current crop sold at Rs. 1900 per maund on ex-Karachi basis. Rains in Chistian and Bahawalnagar may delay crop arrivals there, but Dr. Barkat Ali Soomro, the Vice-Chairman of the Pakistan Central Cotton Committee (PCCC), is still hopeful of obtaining the 1995-96 national cotton production target of 9.5 million bales (of 170 kgs, each). Private sector estimates put next year's cotton production estimates at more than 10 million bales (of 170 kgs each).

Upward drive in New York cotton futures continued on Tuesday. Thus October 1995 delivery closed at US cents 76.91 per pound (up by 21 points), December 1995 delivery closed at US cents 74.76 per pound (up by 41 points), while the March 96 delivery closed at US cents 75.70 per pound (up by 40 points).

Messrs Old World Industries Inc. prominent cotton merchants in the USA have reported the about 350,000 bales (of 480 pounds each) may have been lost and ploughed over because of disease in the Texas valley. Also, lower yields are expected in some parts of the Delta because of excessive heat and draught. However, Old World Industries still expect the 1995-96 US crop to be a record crop exceeding 20 million bales. They have, however, mentioned about the rumours of white fly infestation in parts of San Joaqin Valley (SJV) and also speculation of development of honey dew problems in the SJV. Old World Industries are reporting to normal good crop outlook for India and Pakistan, but have quoted Market Economics News of China that the floods have destroyed as much as 50 percet of Sichuna province's cotton crop, a loss of nearly half a million bales.

Chemical companies have also reported the presence of bollworm in China's cotton crop, but this has not been cofirmed. Carryover stocks of cotton in China into the next season are estimated to be more than 7.5 million statistical bales.

Old World Industries added that yarn prices remained depressed for the last 6 weeks mainly due to extended vacation times by these industries. However, the spinners in the USA are currently said to be reluctant to commit prices which are not in line with the current yarn markets.