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Pakistan cotton prices may not fall with growing demand

Cotton prices in Pakistan will remain on the higher side due to growing demand for the commodity by textile and spinning sectors and higher costs of imports. Physical prices and the arrival of the fresh crop will become steady by the end of September as there would be an influx of around 25,000 bales on each working day.

Import of cotton is not viable as international prices are on par with prices in Pakistan. Garments made-up and the spinning sector might go for imports during December-January 2018. Usually, the textile sector needs to import lint every cotton season to meet the shortfall.

The target for the crop season 2017-18 may not be met. There would be a shortfall of around 2.1 million bales. Recent lint prices are the outcome of excess demand for the commodity in the domestic market. Owing to an increase in planted area, world lint production will rise by two per cent. China’s cotton production is estimated at 4.9 million tons. US production is estimated at 3.8 million tons.

World cotton mill use is expected to remain stable at 24.3 million tons in 2017-18 as high cotton prices have discouraged growth in demand. The US comes next with 19.86 million bales followed by India with 21.75 million bales and Pakistan with 12.17 million bales.