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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