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Cotton market subdued |
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2004-7-16
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Trading remained dull at the local cotton market on Tuesday as traders lacked optimism for cotton futures in absence of any positive changes.
The official spot rate of cotton further dropped by Rs 25 to close at Rs 2,700 per maund as spinners and millers withdrew from markets. On the other hand, it seems textile millers are waiting for further fall in prices, dealers said and added millers and spinners made no fresh deals while ready business remained negligible.
Traders were a harried lot expressing concern that the situation would lead ginners and particularly to growers, to sell stocks at cheaper rates.
Spinners avoided entering into the market as most of the lint available with ginners was of low quality and unfit for producing high quality yarn. They said these bales could be used only for blending purposes.
With a 10-cent fall at 47 cents a pound for US cotton, the country’s textile industry and cotton economy was under pressure within a week.
According to the International Cotton Advisory Committee (ICAC), a record 102 million bales production in the year 2004-05 mainly has pushed back the textile millers to wait for further fall in prices.
Following the ICAC estimation, the federal committee on agriculture set the cotton production at 3.14 million hectares and 10.72 million bales for next season, which seems achievable.
Country grows about 10 million bales of cotton every year, which realizes Rs 100 billion before it reaches textile mills for value added production. |
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