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Pakistan's global cotton prices dip

Official sources say, Pakistani’s raw cotton at present is being traded at an average discount of 13 cents per pound in the international market, due to lack of quality-based pricing system and non-practising of the cotton standardisation system. Analysis of the current price differential with reference to international market (Cotlook index A), and Karachi Cotton Association (KCA) shows that it is over 16 cents per pound for 13 million bales, total $780 million. Thus, this price loss would be manifold in value added textile goods.

The New York Cotton Market price was 72.50 cents per pound, on July 14, this year at China Cotton Index it was 91.25 cents per pound and Indian Cotton Index was 72.40 cents per pound. In comparison, in Pakistan it was 56.16 cents per pound, which is equivalent to Rs 5,017 per 40-kg. This price, though may touch Rs 6,000 per maund if the quality is improved.

Pakistani cotton is considered as one of the most contaminated crop in the world. It is the fourth largest cotton producing country. Cotton from the country is hand-picked with good colour, however, the weather conditions which is dry and hot is a bane. Therefore, it is traded at lower prices and considered most contaminated cotton. APTMA estimated over $1.4 billion loss due to the quality of cotton, whereas National Textile University in a study estimated over $4 billion loss because of cotton contamination.

Cotton from Pakistan is basically of good quality, and according to a six-year survey, only 8-10 per cent cotton falls in grade IV or below and over 90 per cent in Grade III (Base grade) or better. Over 45 per cent of Pakistani cotton would be traded at premium, if there’s proper standardisation.

 
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