Cotton prices have dropped by Rs. 3,000 per 37.324 kg (maund) as the rupee strengthened by as much as Rs. 30 in the open market amid strict government action against black marketing and other confidence-boosting measures.

Karachi Cotton Association has reduced the Ex-Gin price of Cotton from Rs. 21,000 per maund on 2nd September to Rs. 18,800 as of yesterday and has further cut the price by Rs. 800 today while the spot price has also fallen from Rs.22, 758 per maund to below Rs. 20,000 in the similar period. Experts say that these prices are expected to stabilize here if the arrivals remain steady.

“The rise in cotton prices was due to panic buying and only a few selected buyers were in the market. Currently, Rs. 18,000 – Rs. 19,000 per maund is the price where cotton will stabilize,” stated Talha Qureshi, Procurement Manager at Siddiqsons Group while talking to ProPakistani.

On the other hand, Phutti prices have also crumbled from Rs. 9,900 per maund to Rs. 7,500 to Rs. 8,500 across Punjab. On top of everything, the fears of damage to Cotton from floods have also subsided with the Pakistan Meteorological Department forecasting a prolonged hot and dry spell till September 14th.

Traders also said that this volatility in the Cotton market has also badly affected the yarn market resulting in a reduced trading volume and payment delays.

On the other hand, USDA’s monthly report on global supply and demand estimate is also expected to be released next week which can result in a rise in international prices due to the Atlantic Hurricane Season which lasts till November 30 and which will have a trickle-down effect on the local market as well.

Earlier, the Pakistan Cotton Ginners Association reported record Cotton Arrivals of 3 million bales till 3rd September in its fortnightly report which have increased 97 percent YoY amid a production boom. As the lower prices will remain stabilized, farmers have started to worry that they might not get the value for their crop.

Source: Pro Pakistani