Domestic Cotton Prices have fallen by more than Rs. 3,000 in the last few weeks to Rs. 17,700 per maund (37 kg) after touching a peak of Rs. 21,000 per maund at the start of the month.
“There are four primary factors contributing to the continuous fall in cotton prices for the past weeks. One is the recent spell of rains affecting the lint quality, the continuous rise of the rupee against the dollar, the third is the ending season’s picking and the last is the weaker international market” explained a market consultant while talking to ProPakistani.
The US dollar has fallen by more than Rs. 17 against the rupee to below Rs. 290 from the peak of Rs. 307 as a result of a nationwide crackdown on dollar smuggling and illegal trade. The result has been that imported cotton has become a little more lucrative for manufacturers.
However, experts had been expecting the buyers to stay in the local market despite the rise of the rupee against if it was not for the rains which has reduced the arrivals of quality cotton. Farmers are also keeping the good quality cotton separate which indicates that the season can be longer than expected.
Cotton crop has also been damaged by the whitefly pest attack as always happens in the month of September. However, the government has been proactive this year using Land Information Management System (LIMS), army aviation and drones to ensure cluster spray on large swaths of land in Southern Punjab. The efficacy of these operations can only be determined on the basis of final production numbers.
The government had announced the cotton production target of 12.7 million bales for the 2023-24 season but if the rain and pest damage persists, experts believe it will not go beyond 10 million bales.