Chinese Demand For Pakistani Cotton Increases

China has decided to maintain its the highest strategic cotton reserves of 42.61 million bales resultantly the upward trend of prices was trend in the world.

Chinese demand for Pakistani cotton has increased and will benefit the Pakistani growers in near future, said Amanullah Qureshi, former chairman of Pakistan Cotton Ginners Association (PCGA) while talking to media percons here today. He said that China has increased its cotton reserves by 2 million bales. Our local cotton arrival target for fiscal year 2012-13 stands at 12.5 million bales. Local prices would remain range-bound where the domestic textile sector is expected to benefit from increased demand from China given its higher support price. Cotton crop dynamics, both local and global, appear relatively robust for FY13. As a result, world cotton prices would remain on the upside, averaging $1.13 per pound in FY13 as against $1.11 per pound in the same period last year, Qureshi said. World cotton supply, as per USDA, is likely to grow by 2.4 percent on yearly basis to 233.1 million bales in FY13 leading to cotton prices remaining stable.

Domestic cotton price has also averaged at Rs 6,500 per maund in FY13 so far, 1.2 percent where year-to-date arrivals of 12.378 million bales are down marginally by 9.09 percent. Trading remained firm amid unchanged spot rate with strong physical prices while fine line remained in focus, he claimed. He further said that spot rate crossed the figures of Rs 6,500 per maund. Sellers in Sindh and Punjab stations offloaded all grades on slightly higher prices while spinners made deals for all grades in order to strengthen their long positions, he said. Buyers made deals for raw stuff on competitive price in Sindh and Punjab stations at around Rs 6,200 to 6,450 per maund while sellers withholding fine stocks offered their stuff on slightly higher price at around Rs 6,550 per maund, former chairman of PCGA said. Trading for fine grade remained on higher side past week and physical prices of all grades remained on stronger side and even touched Rs 6,550 per maund.

During past week buyers and sellers in Sindh and Punjab stations were entangled in price war for fine lint while several buyers with less liquidity also made forward deals for all grades on a month's basis. Cottonseed arrival at the ginneries of Sindh and Punjab stations remained slow while the ginners produced more than 1.20 million bales by February 10, 2013 with 65 percent share of second grade of lint, traders said.