The bullish trends in local cotton market continued this week. The spot rates of Cotton Association (KCA) first increased the spot rate by Rs300 per maund to Rs19100 on Wednesday and then increased it further on Thursday by Rs 300 per maund and closed it at Rs 20,100 per maund.
The trading volumes remained satisfactory as spinners are generating resources to stock as much cotton they can as harvesting picked up.
The rate of new crop of cotton in Sindh increased to between Rs 20,200 to Rs 20,800 per maund. The rate of Phutti in Sindh galloped to between Rs 8,800 to Rs 10,200 per 40 kg. The rate of cotton in Punjab was slightly lower than Sindh for the first time this year ranging between Rs 21,000 to Rs 21,200 per maund and the rates of Phutti however were higher between Rs 9,000 to Rs 10,500 per 40 kg. The rate of cotton in Balochistan was reported at  Rs 20,500 per maund while the rate of Phutti ranged between Rs 9,700 to Rs 10,500 per 40 kg.
Cotton rates continue to go up despite the fact the country is expecting a bumper cotton harvest. The millers are probably depending on domestic cotton as most of them cancelled the US cotton orders last week.
Cotton crop in the Punjab province is largely safe from floods but Sahiwal and Bahawalpur divisions are facing canal closures due to high level floods. Still the cotton crop is safe because areas under cotton cultivation have not largely been flooded.
An official of the Punjab agriculture department in his media briefing assured that necessary arrangements are being made for the safety of all the crops, including cotton in the flood-affected areas. He advised the farmer to keep liaison with the Irrigation Department and the flood situation should be monitored.
The stability of the cotton market will make the farmers prosperous and have positive effects on the next crop. He further said that the condition of cotton across the province is satisfactory and priority measures are being taken for better care of the cotton crop. The reported hotspot areas are being sprayed with agricultural pesticides with advanced chemistry to control pest/ insect infestation.He was presiding over a meeting organised to monitor the current situation of cotton at Civil Secretariat.
The harvesting phase of the early sown crop is going on. In some areas, the attack of whitefly and pink bollworm has been observed, but it is below the economic limit of damage. The teams of Agriculture Extension and Pest Warning are spraying agricultural pesticides with advanced chemistry.
On Thursday the sales recorded at different markets was satisfactory. Around, 800 bales of Akri Hyder Shah, 800 bales of Kotri Kabeer, 600 bales of Rani Pur were sold at Rs 19,950 to Rs 20,000 per maund, 2800 bales of Saleh Pat were sold in between 19,700 to Rs 20,000 per maund, 800 bales of Rohri were sold in between Rs 19,800 to Rs 20,000 per maund, 400 bales of Pir Wasan were sold in between Rs 19,950 per maund, 200 bales of Sui Gas, 200 bales of Mehrab Pur, 200 bales of Rasoolabad, 400 bales of Hingorja were sold at Rs 19,975 per maund, 2600 bales of Sanghar were sold in between Rs 19,500 to Rs 19,600 per maund, 200 bales of Mir Pur Khas were sold at Rs 19,600 per maund, 200 bales of Nauabad were sold at Rs 19,400 per maund, 2800 bales of Tando Adam were sold at Rs 19,300 to Rs 19,500 per maund, 2800 bales of Shahdad Pur were sold in between Rs 19,300 to Rs 19,500 per maund, 800 bales of Sarkand were sold at Rs 19,500 to Rs 19,800 per maund, 900 bales of Mureed Wala, 200 bales of Yazman Mandi, 1400 bales of Lodhran, 200 bales of Mungi Bangla, 400 bales of Dera Ghazi Khan, 600 bales of Chichawatni, 800 bales of Haroonabad, 2000 bales of Layyah, 1800 bales of Vehari, 300 bales of Multan, 400 bales of Fort Abbas, 600 bales of Rahim Yar Khan, 200 bales of Sadiqabad were sold at Rs 20,000 per maund and 800 bales of Utal were sold in between Rs 19,500 to Rs 19,800 per maund.
In India Cotton candy settled up by 0.17 percent at 59180 amid fears of lower production. India’s Cotton sowing dropped by nearly -1.82% to 122.56 lakh hectares in 2023 against an area sown of 124.82 lakh hectares in 2022. Cotton arrivals so far during the current season that started in October last year have crossed 318 lakh bales according to data available from the Cotton Corporation of India, said the Southern India Mills’ Association (SIMA). The SIMA chairman said that there were reports that the cotton crop size this season will be 311.18 lakh bales.
During this Kharif season, cotton cultivation in Gujarat has achieved a remarkable milestone, surpassing the records of the past eight years. In Rajkot, a major spot market, the price ended at 28697.8 Rupees dropping by -0.24 percent.But in Indian Punjab farmers are expecting bumper cotton crop and millers are hopeful that this year they would not need to buy cotton from the south. The weather has been favorable in Indian Punjab like that in Pakistani Punjab.
In the United States December futures made modest gains last week. The equity market had mixed week but finally settled at lower end. Demand for the US cotton also remained disappointing last week as the deteriorating crop condition continues to worry traders.
December futures made modest gains for the week. The continuing deterioration of the U.S. crop and higher Chinese cotton prices helped boost ICE futures this week. Cotton futures chose to ignore a poor Export Sales Report and stronger U.S. Dollar to finish higher for the fifth consecutive trading session. December futures increased 248 points to settle at 86.09 cents per pound. Daily trading volumes were light this week, and total open interest decreased 7,413 contracts to 200,698.
Equity markets had a mixed week but eventually settled lower on Thursday despite unexpected massive earnings reported in tech stocks. Markets moved in both directions with the release of varying economic reports. Mortgage rates hit their highest level in over two decades, with 30-year fixed mortgage rates now at 7.23 percent. U.S. initial jobless claims were reported at 230,000, lower than market expectations and showing a persistently strong labor market. Worrisome economic news out of China continued to weigh on markets, in particular crude oil. Many of the reports this week provided a bearish sentiment to the market, but many traders are waiting to hear comments from the Fed at their annual symposium of global central bankers taking place late this week.
Both supply and demand have become a major concern in the cotton industry this year. Demand for U.S. cotton proved to be dismal. Net sales of 38,900 Upland bales were reported for the 2023/24 marketing year and 52,800 bales for the 2024/25 crop year. The biggest buyer for the week was China, booking 31,700 bales, followed by Vietnam with 10,800 bales, Bangladesh with 5,100 bales, Honduras with 3,000 bales, and Costa Rica with 2,200 bales. Cancellations were slightly more notable on this report. It has been rumored that Pakistan’s currency issues and prospects of higher-than-expected production might have an impact on demand. It proved true on this report, with Pakistan having 22,000 bales of the 29,500 bales cancelled for the week. Shipments were similar to last week, with a total of 204,200 Upland bales exported. A net total of 1,300 Pima bales were sold this week and 9,600 bales were exported.
The deterioration of the U.S. crop continues to worry traders. The excessive heat and little moisture have caused 32 percent of the country’s areas of cotton production to be considered in drought. The Texas crop is showing to be in worse condition now than at the same point in time as last year. Although the outlook for West Texas and Oklahoma is less than ideal and heat stress is prevalent, temperatures are expected to ease a bit in the coming week. Scattered storms are also in the forecast, which could provide relief to some of the very dry areas. South Texas did receive moisture from Tropical Storm Harold, forcing producers to get some of their cotton out of fields faster than expected. The rainfall received paused picking, but warm temperatures are expected in the forecast for the coming week, which will allow normal harvest activities to resume.
All you need to know about cotton this week
