The local cotton market remained under pressure on Monday, continuing a downward trajectory from previous weeks, with trading volume staying low as cautious sentiment persists among market participants.
According to Naseem Usman, a cotton analyst, cotton prices in Sindh are currently fluctuating between Rs16,700 and Rs17,800 per maund, while prices in Punjab are being reported in a similar range, hovering between Rs17,000 and Rs17,800 per maund. Despite these ongoing fluctuations, the Spot Rate has remained unchanged at Rs17,500 per maund, indicating some degree of stability in the market.
This current bearish phase marks a sharp contrast to earlier periods in 2024, where cotton prices had spiked due to supply concerns and increasing demand from both domestic and international markets. For several months, there had been heightened expectations of a price surge as a result of poor harvests in key cotton-producing regions globally and concerns over climatic impacts on crops. Domestic cotton production, particularly in Sindh, had been hit by adverse weather conditions, leading to a squeeze in supply, which had caused cotton prices to rise significantly.
However, in recent weeks, the market has begun to see a correction, with prices retracting from the highs witnessed earlier. Analysts attribute this shift to several factors, including improved cotton harvests in major regions, easing global supply chain concerns, and a slowdown in demand from international markets. As cotton production in key areas like the United States and India stabilizes, global supply pressures have eased, leading to lower price expectations.
In Sindh, where cotton had been severely affected by weather conditions earlier, the market is now seeing slightly more stable production levels, which has somewhat alleviated the price pressures. However, the volatility remains, as local farmers and traders continue to grapple with fluctuating global prices and the effects of last season’s poor crop yields.
The polyester fiber market also showed stability, with prices reported at Rs351 per kilogram, continuing to track the broader commodity trends. The lack of significant movement in the fiber sector is in line with the overall subdued market conditions that have affected multiple sectors reliant on cotton.
Despite the recent price fluctuations, analysts remain cautious, with many traders hoping for clearer signals in the coming weeks to determine the future direction of the market.
