Pace of seed cotton arrivals continues to slow down
Karachi, March 12, 2013 (PPI-OT): The pace of seed cotton arrivals has continued to slow down, with final production expected at close to 13 million bales. Asking prices for seed cotton have been very firm at between Rs. 2,450 and Rs. 3200 per 40 kilos, depending on the quality.
The planting of new crop has finally started in early cotton growing areas, following a delay of about 15 to 20 days. Looking at the current pace of cotton sowing and the comparisons with maize and corn prices, a significant portion of early-cotton areas could be replaced with alternative crops.
Local observers report that total cotton acreage in 2013 maybe reduced by around 5 percent (government sources have placed a target of 7.6 million acres, while some private estimates have been pitched as low as 7.2 to 7.3 million acres).
Bullish conditions have prevailed in the local cotton market. Ginners have remained very tight sellers, and turnover has remained low, with mills continuing with a cautious approach. Business in better grade lots has been reported at between Rs. 6,700 and Rs. 7,000 per maund (83.50/8725 US cents per Ib), ex-gin.
Average quality cotton has attracted around Rs. 5, 90010 Rs. 6,500 per maund. On the import front sales have been reported in 500 tonnes Australian SLM at 99.00 US cents per Ib, CFR Karachi, and a few hundred tonnes Indian Shankar-6 at between 93.00/94.00, CFR Karachi and ex-Wagah border.
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