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Drooping price impedes spirit of cotton traders

27
Oct '08

The consequence of global financial meltdown is apparent in almost every aspect of life. This is quite evident from the fact cotton prices have acquired a declining trend at the Karachi Cotton Market since last month.

Drooping cotton prices are making it difficult for the cotton traders to survive in this current situation.

During the week starting from October 20 to 25, the market remained in the tight grip of traders.

Ghulam Rabbani, Director of KCA, stated that market evidenced an average trading session as spot rates at KCA stood firm on Monday at Rs3,375 per maund. The demand for the lint is on the higher side.

Almost 200 bales of upper Sindh were sold at Rs3,400 per maund, 200 bales of southern Punjab at Rs3,395 per maund, 200 bales of upper Sindh for Rs3,415 per maund and 200 bales Mirpurkhas exchanged hands at Rs3,400 per maund.

Cotton producers were relieved as for the past few days prices continued to be stable. On Tuesday, the spot rate at KCA remained as it was on the earlier day and the settlement declared at Rs3375 per maund with no changes. Thin activities observed in the market. There was news from lower sindh about some business in low range. Over all trend was low and weak.

However, experts opine that Wednesday might bring something in the frames. According to Mr Ghulam Rabbani, spinners did not show any comfort carrying cotton and covering for long, as they were unsure about the future and this was the reason for low demand.

On the other hand, the power problem is touching its peaks and thus ginners were confronted with severe problems in payments and supplies. Being unable to produce enough stocks to compare the supply of raw material has forced them to sell a bit cheaper and earn something to keep the supply lines alive.

The spot rate at KCA lost another step on Wednesday and the settlement price was declared at Rs3300 per maund showcasing a fall of Rs75 per mound. Thin activities were observed in the market. 200 bales of Mubarik pur, 600 bales of Fazilpur and 400 bales of Rajan pur were traded at Rs3350 per mound.

On Thursday, spot rate at KCA moved further down and were quoted at Rs3,250 per maund reflecting a plunge of Rs50. Lack of buying interest forced sellers to adjust their margins with minimum profit in order to ease the liquidity flow as commercial banks were showing reluctance to support the financial needs of the cotton community.

According to Mr Rabbani, it is very unlikely that sentiments the cotton market would rebound in recent future. If incase it bounces back, the process would be very slow.

The KCA spot rate fell another Rs50 on Friday, and touched the mark of Rs3200 per maund. Meagre businesses were observed but with in a range of Rs3100 to Rs3300 per mound. Industry experts say that worsening power problem may give a new direction to the cotton market.

The spot rate at KCA remained changed on Saturday and the settlement stood at Rs3000 per maund.

Fibre2fashion News Desk - India

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