Karachi—Prices plunged on the domestic cotton market this week as global fiber values weekend, few appeared willing to buy yarns, world-wide economic condition worsened and more supply and surpluses of cotton entered the market.
Moreover, the overdue large correctional factor occurred in recent weeks when frontal month price of cotton which had reached unprecedented heights some time in the second week of March 2011 reported at 227 Cents per pound on the New York cotton futures exchange (ICE) fell sharply in recent sessions to US Cents 113.42 per pound for the benchmark December, 2011 contract which settled on July 6, 2011.
Taking cue for these bearish developments, ready cotton prices took a tailspin over the last several sessions and then undertook a dramatic free fall this week. Most of old crop (2010-2011) has disappeared from the Market. Brokers said in Karachi that domestic seedcotton (Kapas/Phutti) prices of the new crop (2011-2012) have fallen by about Rs 1,000 per 40 Kgs during the last ten days in both Sindh and Punjab while lint prices in both the provinces have nearly decreased by Rs 2,300 per maund (37.32 Kgs) over the same period. Similarly, cotton waste prices are also said to have fallen sharply over the past couple of weeks.
Brokers said on Thursday that new crop (2011-2012) seedcotton prices in Sindh ranged from Rs 2,500 to Rs 2,950 per 40 Kgs while in the Punjab they stretched from Rs 2,500 to Rs 2,900 per 40 Kgs. Karachi traders said that about eight ginning factories in Sindh are processing the new crop cotton, while in the Punjab nearly 50 factories are pressing the new crop lint. Ginned cotton from Sindh reportedly sold from Rs 6,700 to Rs 6,900 per maund (37.32 Kgs), while in the Punjab it was selling from Rs 6,500 to Rs 6,800/Rs 6,900 per maund as per quality.
On Thursday, ready sales of new cotton crop (2011-2012) in Sindh comprised of 400 bales of cotton each from Shahdadpur and Sanghar at Rs 6,700 per maund (37.32 Kgs), while 400 bales from Hyderabad sold at Rs 6,800 per maund and another 400 bales also from Hyderabad sold at Rs 6,900 per maund.