Ginners are sitting on a pile of 0.5 million cotton bales with trading activity having come to a grinding halt for the second consecutive week as textile factories are closed amid the novel coronavirus, market observers said on Saturday.
Karachi Cotton Association kept issuing official spot rate as there was no trade activity in the cotton market due to coronavirus-sparked lockdown. The spot rate stayed at Rupees 8,800 per maund, while cotton rates in Sindh and Punjab remained at Rupees7,000 to Rs8,800 per maund. Pakistan Cotton Ginners Association did not release its fortnightly cotton arrivals report, which was due on April 3.
A large number of textile mills and ginning factories, having stocks of around 500,000 bales with no buyers, are shut down. Industry officials said ginners are going through immense pressure as bank interests on their loans are increasing, while weight of cotton is decreasing amid no trade.
Naseem Usman, Karachi Cotton Brokers Association Chairman said mixed trade activity was recorded in international trade markets. The prices kept fluctuating in the New York cotton market. Due to impacts of coronavirus and a decline in oil prices, New York cotton market fell to 48.38 cents per pound. Oil prices saw an improvement, which affected the cotton market and rates move up to 51 cents per pound.
He said situation is moving towards normalcy in China and trade activity is resuming over there, while prices and activity remained motionless in India.
Pakistani textile industries, accounting for 60 percent of export revenue, are suffering from cancellation of export orders from Europe and the USA. Local mills have huge inventory of finished production. Several mills have stopped further production following supply disruption.
