After fears of pre-monsoon and monsoon rains over the past few weeks including considerable showers received in several parts of the cotton belt, lint prices have shootup recently by Rs 250 to Rs 300 per maund (37.32 kgs). The relentless rise New York cotton futures prices in recent past aided the bullish sentiment in the cotton market unmistakably. Moreover, reported rise in asking prices for physical cotton almost universally by about 10 to 12 cents per pound has ensured that fibre prices would most likely stay at the loftier levels attained over the recent three or four weeks.
The increase of the ex-gin price for Grade 3 cotton from Rs 2600 on 27th June 2007 to Rs 2850 per maund (37.32 kgs) on 12th July 2007 as determined by the Karachi Cotton Association (KCA) is quite reflective of the strong condition prevailing in the cotton market at present.
Yarn prices have also increased in tandem and appear quite supportive of rising cotton prices. Consequently, almost every day since last fortnight, lint prices have become tighter and are cruising at higher levels. Even though various assessments still evaluate the forthcoming crop (2007-08) in Pakistan to yield the government target of 14.14 million bales (170 kgs), but increasing use of cotton by domestic mills exceeding 16 million bales per annum is likely to keep lint prices at a higher plane.
Just two and a half months ago new crop (2007-08) sales from Sindh started at Rs 2500 per maund for August 2007 delivery. Today a ginner in Sindh sold at Rs 2950 per maund (37.32 kgs) for immediate delivery and is now asking for Rs 3,000 per maund.Brokers said in Karachi on Thursday that one factory each in Sindh are processing new crop cotton (2007-08) while anywhere from 12 to 15 factories in Punjab are pressing new crop lint. More factories are expected to start operating soon.
Seedcotton (kapas/phutti) from new crop in Sindh was said to be selling from Rs 1200 to Rs 1225 per 40 kgs, while in the Punjab it was said to be selling from Rs 1250 to Rs 1300 per 40 kilograms. Ginned cotton from Sindh was being sold from Rs 2900 to Rs 2950 per maund while in the Punjab it was being offered from Rs 3000 to Rs 3100 per maund on Thursday.
According to one broker in the yarn market, the price of coarse count of yarn being used to produce denim fabrics has gone up from Rs 470 to Rs 510 per 10 pounds and is in short supply. Several of the yarn producers are said to be reluctant sellers. Cotton waste prices have also reportedly risen following the increase in cotton and yarn prices.
Cotton and cotton products are thus obtaining higher prices and their supply is said to be tightening. Mills had said recently that their general parity price of cotton in relation to yarn prices was around Rs 3000 per maund (37.32 kgs).Under these circumstances, our market for both cotton and textile is probing for higher prices and may continue their upward journey. This is a positive development which seems to signal better prospects for a sizeable section of the cotton economy of Pakistan.
New York cotton futures
Undoubtedly the New York cotton futures have continued to post high gains over the past several sessions but stalled on last Wednesday except October 2007 delivery which made nominal gain. The bullish fervour gained momentum when United States Department of Agriculture (USDA) released planting data recently showing 18-year low cultivation to only 11.10 million acres in 2007-08 crop which would downsize cotton output to only about 16.8 million bales (480 lbs). New York cotton futures have made a remarkable recovery from early May 2007 when frontal months were languishing at 47 or 48 cents per pound against the current levels of about 66 or 67 cents per pound. Lower cotton prices in the past and brighter prospects for alternate crops like corn, wheat and soyabean will reduce acreage on cotton and boost fibre prices.
EXPORT OF YARN
The prices of yarn have improved by10% in last two week 20/1cd wvg have been sold around the level of usd 390/blae and for knnitting at usd 400/bale ~405/bale for good quality yarn. HONG KONG,KOREA AND CHINA booked necessary quantities of yarn in last two week.This buying speree inline with high cotton prices have picked the market up.Both spinners and weavers are under no selling pressure due to good sales of fabric and in response the local yarn market has been very active. Keeping inview the above mentioned facts it appars that the prices of yarn and fabric from pakistan will remain firm in future and positively have all the possibilities to further go up the levelof USD 400 to 410/blae for20/1cd wvg.It is advisalbe to book aleast half of the requirements immedaitley to secure goods quality of yarn and fabrics at resonalbe prices.
The increase of the ex-gin price for Grade 3 cotton from Rs 2600 on 27th June 2007 to Rs 2850 per maund (37.32 kgs) on 12th July 2007 as determined by the Karachi Cotton Association (KCA) is quite reflective of the strong condition prevailing in the cotton market at present.
Yarn prices have also increased in tandem and appear quite supportive of rising cotton prices. Consequently, almost every day since last fortnight, lint prices have become tighter and are cruising at higher levels. Even though various assessments still evaluate the forthcoming crop (2007-08) in Pakistan to yield the government target of 14.14 million bales (170 kgs), but increasing use of cotton by domestic mills exceeding 16 million bales per annum is likely to keep lint prices at a higher plane.
Just two and a half months ago new crop (2007-08) sales from Sindh started at Rs 2500 per maund for August 2007 delivery. Today a ginner in Sindh sold at Rs 2950 per maund (37.32 kgs) for immediate delivery and is now asking for Rs 3,000 per maund.Brokers said in Karachi on Thursday that one factory each in Sindh are processing new crop cotton (2007-08) while anywhere from 12 to 15 factories in Punjab are pressing new crop lint. More factories are expected to start operating soon.
Seedcotton (kapas/phutti) from new crop in Sindh was said to be selling from Rs 1200 to Rs 1225 per 40 kgs, while in the Punjab it was said to be selling from Rs 1250 to Rs 1300 per 40 kilograms. Ginned cotton from Sindh was being sold from Rs 2900 to Rs 2950 per maund while in the Punjab it was being offered from Rs 3000 to Rs 3100 per maund on Thursday.
According to one broker in the yarn market, the price of coarse count of yarn being used to produce denim fabrics has gone up from Rs 470 to Rs 510 per 10 pounds and is in short supply. Several of the yarn producers are said to be reluctant sellers. Cotton waste prices have also reportedly risen following the increase in cotton and yarn prices.
Cotton and cotton products are thus obtaining higher prices and their supply is said to be tightening. Mills had said recently that their general parity price of cotton in relation to yarn prices was around Rs 3000 per maund (37.32 kgs).Under these circumstances, our market for both cotton and textile is probing for higher prices and may continue their upward journey. This is a positive development which seems to signal better prospects for a sizeable section of the cotton economy of Pakistan.
New York cotton futures
Undoubtedly the New York cotton futures have continued to post high gains over the past several sessions but stalled on last Wednesday except October 2007 delivery which made nominal gain. The bullish fervour gained momentum when United States Department of Agriculture (USDA) released planting data recently showing 18-year low cultivation to only 11.10 million acres in 2007-08 crop which would downsize cotton output to only about 16.8 million bales (480 lbs). New York cotton futures have made a remarkable recovery from early May 2007 when frontal months were languishing at 47 or 48 cents per pound against the current levels of about 66 or 67 cents per pound. Lower cotton prices in the past and brighter prospects for alternate crops like corn, wheat and soyabean will reduce acreage on cotton and boost fibre prices.
EXPORT OF YARN
The prices of yarn have improved by10% in last two week 20/1cd wvg have been sold around the level of usd 390/blae and for knnitting at usd 400/bale ~405/bale for good quality yarn. HONG KONG,KOREA AND CHINA booked necessary quantities of yarn in last two week.This buying speree inline with high cotton prices have picked the market up.Both spinners and weavers are under no selling pressure due to good sales of fabric and in response the local yarn market has been very active. Keeping inview the above mentioned facts it appars that the prices of yarn and fabric from pakistan will remain firm in future and positively have all the possibilities to further go up the levelof USD 400 to 410/blae for20/1cd wvg.It is advisalbe to book aleast half of the requirements immedaitley to secure goods quality of yarn and fabrics at resonalbe prices.
