The local cotton market throughout last week remained steady and the trading volume remained satisfactory. The rate of cotton in Sindh ranged between Rs15000 to Rs17500 per maund. The rate of Phutti in Sindh fluctuated between Rs 6,500 to Rs 8,200 per 40 kg. The rate of cotton in Punjab was high at Rs15500 to Rs18000 per maund and the rate of Phutti in Punjab was between Rs7500 to Rs8700 per 40 kg. The rate of cotton in Balochistan ranged from Rs15500 to Rs16000 per maund while the rate of Phutti was between Rs7500 to Rs9000 per 40 kg.
According to data from the Pakistan Cotton Ginners Association (PCGA), ginning factories in the country had sold up to 4.2 million bales of cotton to the textile industry by the end of September 2023, the highest figure for at least all of last decade.
Aggressive inventory building by the textile industry so early into the cotton marketing season could either mean that the industry is expecting good export orders or is making up for its dried inventory.
Nationwide cotton output increased this year, despite a decline in Punjab. Cotton output this year is up 22 percent on the back of outstanding growth in Sindh, where output rose 84 percent and easily absorbed the impact of a 16 percent decline in Punjab’s yield to date.
Cotton available to ginning factories also saw a large increase of about 16 percent, which will invariably help increase supplies of cloth and other domestically produced raw materials. The increased availability of local raw cotton and processed products will also help reduce the textile industry’s need for raw materials from abroad, which in turn will help reduce the country’s import bill. Less than 5 percent of total bales produced by local gins have been exported, reflecting the high demand from the local textile industry.
However, the large increase in cotton output is still below the government’s projections at the start of the year. This is mainly due to the impact of losses caused by a deluge of whiteflies causing crop losses in Punjab. The industry group expects output for the full year to be around nine million bales, well off the government’s 11.5 million target — which we must note would be an all-time high for the country. Another cause for concern is the relatively high level of unsold stock available with ginners — over 15 percent of output this year and almost double the normal amount.
The Trading Corporation of Pakistan is not buying up stocks to build a buffer and help stabilize prices, which could cause farmers to sow more lucrative crops next year, setting the stage for another cotton shortage, which would take us back to square one.
On Thursday 200 bales of Shahdad Pur were sold at Rs 14,500 per maund, 1000 bales of Dharki were sold at Rs 18,000 per maund, 1800 bales of Tando Adam were sold at Rs 14,500 to Rs 17,000 per maund, 1800 bales of Saleh Pat were sold at Rs 15,500 to Rs 16,000 per maund, 200 bales of Halani were sold at Rs 16,700 per maund, 600 bales of Ahmed Pur East were sold at Rs 18,000 per maund, 400 bales of Donga Bonga were sold at Rs 17,500 per maund, 200 bales of Chichawatni were sold at Rs 16,950 per maund, 800 bales of Bahawlpur were sold at Rs 16,300 to Rs 17,000 per maund, 600 bales of Faqeer Wali were sold at Rs 17,500 per maund, 2800 bales of Yazman Mandi were sold at Rs 16,300 to Rs 17,000 per maund and 600 bales of Hasil Pur were sold at Rs 16,500 to Rs 17,100 per maund.
In India in Punjab, Haryana, and Rajasthan there were no buyers for salvaged produce after pink bollworm wreaks havoc. Labourers refuse to pick leftover crops as the yield is too low and traders refuse to buy citing poor quality.
Bt Cotton crops in the northern cotton zone of Haryana, Rajasthan, and Punjab have been destroyed by the pink bollworm (PBW) pest this year. With over 90 percent of the yield damaged in some areas, farmers are struggling to salvage their remaining produce.
Those who have managed to pick it now face uncertainty about whether their produce will find a price in the market even below the minimum support price (MSP). Meanwhile, the little cotton that is arriving in the market can not be bought as the quality is too poor, according to traders.
As per government reports, pink bollworm has attacked the entire cotton belt in the north. About 65 percent of cotton production in Haryana and Punjab has been severely damaged, while Rajasthan has faced losses of up to 90 percent.
PBW is a worm that destroys parts of the developing cotton fruit, such as the square (flower bud) and the boll (rounded sac of seeds with cotton fibres). Adult worms are thin grey moths that lay eggs on buds, flowers, and bolls. The larvae hatch from the eggs and burrow into the bolls to feed on the seeds. It cuts through the lint and stains it in the process, resulting in a loss of quality.
To provide resistance against the American bollworm, pink bollworm, and spotted bollworm, the Indian government introduced the genetically modified pest-resistant cotton variety Bt Cotton (Bollgard II seed). However, the pink bollworm has developed resistance to Bt cotton over time.
In the United States retail sales were higher than expected but clothing sales declined that added pressure on cotton prices.
December futures faced pressure this week, breaking through the low end of the trading range that was established in the past few months. Cotton prices were higher going into the weekend, being boosted by rising crude prices and geopolitical concerns. Prices pulled back early in the week, settling at low levels not seen since August of this year. Support was found on Wednesday when fixation levels were triggered, helping futures bounce back to the lower end of the long-term moving average. A lackluster Export Sales Report and mixed news in the outside market caused cotton futures to trade on both sides of the market on Thursday. For the week ending October 19, December futures settled at 84.27 cents per pound, down 65 points when compared to the week prior. The certificated stock increased by 14,634 bales, reaching its highest level since 2021, and finished the week at 58,205 bales. The daily volume traded was heavy this week, but total open interest declined 3,532 contracts to 248,078.
It was another volatile, mixed week for outside markets. Geopolitical tensions continue with the Israel and Hamas conflict and have many worried the conflict will spread further in the Middle East. This has impacted crude oil prices recently, keeping crude trading up and down. Despite the U.S. removing sanctions against Venezuela, crude managed to edge out gains to finish the week. Higher than-expected U.S. Retail Sales pressured major indexes on Tuesday but added support to the Fed’s higher-for-longer interest rate outlook. The headline figure showed a gain of 0.7 percent for September, but the clothing and apparel sector declined 0.8 percent, which added to cotton’s decline. Despite rallying yields on US treasuries, which reached a 16-year high, the U.S. Dollar stayed within a tight range for the week. U.S. Initial Jobless claims were lower than expected, falling below 200,000 claims for the first time since February of this year. Stocks were mixed to finish the week after the Fed Chair signaled there could be an extended pause in interest rates but does not view the current rates as too high.
The recent narrative of weak demand for U.S. cotton proved to be true once again. For this week the U.S. Export Sales Report showed another week of lackluster demand for U.S. cotton. A net total of 71,300 Upland bales and 7,200 Pima bales were sold this week. For Upland cotton, Guatemala was the biggest buyer, booking 21,100 bales. China followed closely by booking 20,700 bales, then Bangladesh with 19,300 bales, Peru with 8,400 bales, and Vietnam with 6,500 bales. Shipments continue to lag the pace needed to reach the current USDA export estimate of 12.2 million bales. A total of 109,900 Upland bales and 1,000 Pima bales were shipped for the week.
It has been a challenging year for producers, but thankfully this past week’s weather conditions were ideal as harvest advances across West Texas, Oklahoma, and Kansas. The warm, dry conditions are set to continue into next week, which will help as adverse weather is expected towards the end of the month. Colder temperatures and above-average rainfall are expected at the end of October, which could impact the current pace of harvest. Overall crop conditions worsened slightly this week, but the amount of bolls open and cotton harvested are right on pace for what is typically seen at this point in the year. As of October 15, 87 percent of bolls have opened throughout the country and 33 percent of the expected crop has been harvested.
Although favorable weather conditions are expected in the coming week, weather is still a concern as the crop starts to come in. Next week’s Export Sales Report will play its usual role, as many are wondering if the recent price dip ignited demand. Lastly, traders will spend more time monitoring daily classing reports and what is being offered in the cash market.
According to data from the Pakistan Cotton Ginners Association (PCGA), ginning factories in the country had sold up to 4.2 million bales of cotton to the textile industry by the end of September 2023, the highest figure for at least all of last decade.
Aggressive inventory building by the textile industry so early into the cotton marketing season could either mean that the industry is expecting good export orders or is making up for its dried inventory.
Nationwide cotton output increased this year, despite a decline in Punjab. Cotton output this year is up 22 percent on the back of outstanding growth in Sindh, where output rose 84 percent and easily absorbed the impact of a 16 percent decline in Punjab’s yield to date.
Cotton available to ginning factories also saw a large increase of about 16 percent, which will invariably help increase supplies of cloth and other domestically produced raw materials. The increased availability of local raw cotton and processed products will also help reduce the textile industry’s need for raw materials from abroad, which in turn will help reduce the country’s import bill. Less than 5 percent of total bales produced by local gins have been exported, reflecting the high demand from the local textile industry.
However, the large increase in cotton output is still below the government’s projections at the start of the year. This is mainly due to the impact of losses caused by a deluge of whiteflies causing crop losses in Punjab. The industry group expects output for the full year to be around nine million bales, well off the government’s 11.5 million target — which we must note would be an all-time high for the country. Another cause for concern is the relatively high level of unsold stock available with ginners — over 15 percent of output this year and almost double the normal amount.
The Trading Corporation of Pakistan is not buying up stocks to build a buffer and help stabilize prices, which could cause farmers to sow more lucrative crops next year, setting the stage for another cotton shortage, which would take us back to square one.
On Thursday 200 bales of Shahdad Pur were sold at Rs 14,500 per maund, 1000 bales of Dharki were sold at Rs 18,000 per maund, 1800 bales of Tando Adam were sold at Rs 14,500 to Rs 17,000 per maund, 1800 bales of Saleh Pat were sold at Rs 15,500 to Rs 16,000 per maund, 200 bales of Halani were sold at Rs 16,700 per maund, 600 bales of Ahmed Pur East were sold at Rs 18,000 per maund, 400 bales of Donga Bonga were sold at Rs 17,500 per maund, 200 bales of Chichawatni were sold at Rs 16,950 per maund, 800 bales of Bahawlpur were sold at Rs 16,300 to Rs 17,000 per maund, 600 bales of Faqeer Wali were sold at Rs 17,500 per maund, 2800 bales of Yazman Mandi were sold at Rs 16,300 to Rs 17,000 per maund and 600 bales of Hasil Pur were sold at Rs 16,500 to Rs 17,100 per maund.
In India in Punjab, Haryana, and Rajasthan there were no buyers for salvaged produce after pink bollworm wreaks havoc. Labourers refuse to pick leftover crops as the yield is too low and traders refuse to buy citing poor quality.
Bt Cotton crops in the northern cotton zone of Haryana, Rajasthan, and Punjab have been destroyed by the pink bollworm (PBW) pest this year. With over 90 percent of the yield damaged in some areas, farmers are struggling to salvage their remaining produce.
Those who have managed to pick it now face uncertainty about whether their produce will find a price in the market even below the minimum support price (MSP). Meanwhile, the little cotton that is arriving in the market can not be bought as the quality is too poor, according to traders.
As per government reports, pink bollworm has attacked the entire cotton belt in the north. About 65 percent of cotton production in Haryana and Punjab has been severely damaged, while Rajasthan has faced losses of up to 90 percent.
PBW is a worm that destroys parts of the developing cotton fruit, such as the square (flower bud) and the boll (rounded sac of seeds with cotton fibres). Adult worms are thin grey moths that lay eggs on buds, flowers, and bolls. The larvae hatch from the eggs and burrow into the bolls to feed on the seeds. It cuts through the lint and stains it in the process, resulting in a loss of quality.
To provide resistance against the American bollworm, pink bollworm, and spotted bollworm, the Indian government introduced the genetically modified pest-resistant cotton variety Bt Cotton (Bollgard II seed). However, the pink bollworm has developed resistance to Bt cotton over time.
In the United States retail sales were higher than expected but clothing sales declined that added pressure on cotton prices.
December futures faced pressure this week, breaking through the low end of the trading range that was established in the past few months. Cotton prices were higher going into the weekend, being boosted by rising crude prices and geopolitical concerns. Prices pulled back early in the week, settling at low levels not seen since August of this year. Support was found on Wednesday when fixation levels were triggered, helping futures bounce back to the lower end of the long-term moving average. A lackluster Export Sales Report and mixed news in the outside market caused cotton futures to trade on both sides of the market on Thursday. For the week ending October 19, December futures settled at 84.27 cents per pound, down 65 points when compared to the week prior. The certificated stock increased by 14,634 bales, reaching its highest level since 2021, and finished the week at 58,205 bales. The daily volume traded was heavy this week, but total open interest declined 3,532 contracts to 248,078.
It was another volatile, mixed week for outside markets. Geopolitical tensions continue with the Israel and Hamas conflict and have many worried the conflict will spread further in the Middle East. This has impacted crude oil prices recently, keeping crude trading up and down. Despite the U.S. removing sanctions against Venezuela, crude managed to edge out gains to finish the week. Higher than-expected U.S. Retail Sales pressured major indexes on Tuesday but added support to the Fed’s higher-for-longer interest rate outlook. The headline figure showed a gain of 0.7 percent for September, but the clothing and apparel sector declined 0.8 percent, which added to cotton’s decline. Despite rallying yields on US treasuries, which reached a 16-year high, the U.S. Dollar stayed within a tight range for the week. U.S. Initial Jobless claims were lower than expected, falling below 200,000 claims for the first time since February of this year. Stocks were mixed to finish the week after the Fed Chair signaled there could be an extended pause in interest rates but does not view the current rates as too high.
The recent narrative of weak demand for U.S. cotton proved to be true once again. For this week the U.S. Export Sales Report showed another week of lackluster demand for U.S. cotton. A net total of 71,300 Upland bales and 7,200 Pima bales were sold this week. For Upland cotton, Guatemala was the biggest buyer, booking 21,100 bales. China followed closely by booking 20,700 bales, then Bangladesh with 19,300 bales, Peru with 8,400 bales, and Vietnam with 6,500 bales. Shipments continue to lag the pace needed to reach the current USDA export estimate of 12.2 million bales. A total of 109,900 Upland bales and 1,000 Pima bales were shipped for the week.
It has been a challenging year for producers, but thankfully this past week’s weather conditions were ideal as harvest advances across West Texas, Oklahoma, and Kansas. The warm, dry conditions are set to continue into next week, which will help as adverse weather is expected towards the end of the month. Colder temperatures and above-average rainfall are expected at the end of October, which could impact the current pace of harvest. Overall crop conditions worsened slightly this week, but the amount of bolls open and cotton harvested are right on pace for what is typically seen at this point in the year. As of October 15, 87 percent of bolls have opened throughout the country and 33 percent of the expected crop has been harvested.
Although favorable weather conditions are expected in the coming week, weather is still a concern as the crop starts to come in. Next week’s Export Sales Report will play its usual role, as many are wondering if the recent price dip ignited demand. Lastly, traders will spend more time monitoring daily classing reports and what is being offered in the cash market.