Cotton prices have touched new highs in the local market amid a fall in local production, delayed in cotton imports from abroad.
On Wednesday, Naseem Usman, the Chairperson of the Karachi Cotton Brokers Forum has said that today’s rates of cotton are the highest since 2010-11.
The price of cotton as quoted by Karachi Cotton Association comes to Rs 13,580 per 40 kg as the spot rate for white lint and the rate of seed cotton moves around Rs 5,200 and Rs 6,200 per 40 kg.
The ex-gin price of cotton in Karachi was Rs 8,550 per 40 kg while the price of seed cotton moved around 4,000 per 40 kg to Rs 4,500 per 40 kg last year.
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There are many factors for the big hike of cotton rates in the country including a fall in the local production of cotton, unexpected delayed cotton imports, increasing rates of freight, negative crop outlook reports from neighboring countries and rising rate of the dollar in Pakistan.
It is likely that the rising trend of the cotton price will not come down in near future. A mill owner told, “We have purchased almost 11 million bales of cotton from abroad but the shipment is facing delays mainly due to Covid-19 restrictions. The delay is impacting the local market as we have to meet our requirements from the domestic sources until the arrival of the imported raw material.”
He says that they are purchasing the local cotton to keep their plant running but the quality of this cotton is not as per requirements.
Muhammad Junaid Iqbal, a ginner from Punjab says that the rate of seed cotton in the provincial market is around Rs 6,200 per 40 kg and it is likely that the price of the same may touch Rs 7,000 if the shipments are further delayed from abroad.
He added that due to heavy monsoon, the cotton crop in India has come down from 20 percent to 25 percent and the almost same kind of problem is existing in China. This may aggravate the situation.