November 2008

 
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Cotton market under global economic crisis

Cotton harvesting is getting momentum with the passage of time in dry and clear weather conditions. As per cotton figures of Pakistan Cotton Ginners' Association, some 20% crop has reached the ginneries by the close of the last month of October.

Lint quality in Lower Sindh stations has deteriorated possibly due to attack of Mealy bug on cotton plants and drastic reduction in cotton prices. Some of the ginning factories in late areas have further delayed operation due to wide fluctuation in cotton prices and some due to liquidity crunch. The banks offering cash credit facilities to ginners are doing so freely, taking into account the drastic fall in cotton prices and so the stock valuation. However, these banks are to some extent restricting credit facilities to spinning mills.

In view of severe global financial crisis  in US and EU countries and lesser in other countries of Asian and African continents,  there is an increasing tendency of a drastic cut in textile exports.

National cotton consumption is likely to be reduced considerably perhaps coming to the level of 14.0 million bales against last year's reported mill-use of 14.8 million bales, reducing the gap between cotton production and consumption equivalent to 2.0 million 170-Kg bales this season against equivalent to some 4.6 million 170-Kg bales imported last season.   

 


 
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