Soaring cotton prices: government must declare its strategy, stakeholders demand

KARACHI  (October 20, 2010) : Amidst hovering uncertainties because of record-breaking highs in the cotton prices, stake-holders of textile sector are in search of the government's strategy for their near-term plan, dealers said on the cotton market on Tuesday The Karachi Cotton Association (KCA) official spot rate was left unchanged at Rs 7450, they said.

In the ready business over 30,000 bales of cotton changed hands between Rs 5400-7700, they said. Seed cotton prices in Sindh were higher at Rs 3400-3500, in Punjab prices followed the same pattern after picking up modestly at Rs 3200-3450, they added.

Market sources said that prices went up sharply due to higher demand because supply was not so tight as it appeared that the growers were ready to sell at the present lucrative rates. Under the prevailing conditions when the world's economy is still not out of crisis, it's craziness to continue buying, some analysts said. They said that value-added sector has started hue and cry over the exports of cotton because of shortage of production in the country.

On Monday the US cotton futures rose slightly but were way off record highs hit last week, while Chinese cotton futures fell by their daily limit before recovering. After shattering a record high price on Friday set in 1995, trading was more subdued on Monday as fibre contracts consolidated and eyed fresh leads. The key December US cotton contract rose 0.11 cent to $1.0998 per lb at 10:11 am EDT (1411 GMT), off the record price of $1.198. US cotton has risen 65 percent since July on the fundamentals of strong demand and tight stocks - plus investment funds pouring into the market.

The following deals were reported: 1200 bales of cotton from Tando Adam sold at Rs 7500-7600, 3000 bales from Shahdad Pur 7500-7600, 2000 bales from Sanghar at 7450-7500, 1600 bales from Nawabshah at 7550-7600, 2200 bales from Mirpurkhas at Rs 7550-7600, 2400 bales from Khair Pur at Rs 7600, 2800 bales rom Upper Sindh 7600-7700, 600 bales from Rahim Yar Khan 7500, 3000 bales from Burewala at Rs 7450-7500, 200 bales from Chistian at Rs 7400, 1000 bales from Hasil Pur at Rs 7400-7500, 800 bales from Muridwala at Rs 7400-7450, 200 bales from Gojra at Rs 7400, 400 bales from Pak Pattan at Rs 7400, 1200 bales from Haroonabad at Rs 7425, 1200 bales from Gaggo Mandi at Rs 7475, 2200 bales from Kabirwala at Rs 7500, 1400 bales from Chichawatni at Rs 7500, 400 bales from Tonsa Sharif at Rs 7500, 400 bales from Khanewal at Rs 7500, 1000 bales from Rajan Pur at Rs 7600, 1200 bales from Khanewal at Rs 7400-7450.