Cotton market: prices stable amid slow trade
Modest trading activity was witnessed on the cotton market on Friday as ginners were trying to reap maximum profit because of shortage of fine type, dealers said. The official spot rate stabilised, showing no change in overnight price at Rs 6,900, they added. In the ready session, over 3,000 bales of cotton done between Rs 6700 and 7200, dealers said.
Copyright Business Recorder, 2014
According to the market sources, millers and spinners were keen to lay hands over the quality cotton, but ginners' inflexible attitude towards prices, barred them from making new deals at their psychological level. In spite, some needy mills made deals at the current levels to keep their business activity continue, cotton analyst, Naseem Usman said.
The encouraging news is that the textile exports picked up by 6.5 percent during the current fiscal year and hopefully, despite inability of basic facilities, the exports target may be achievable, experts said. Besides, Chinese buyers went on their biggest buying spree of US cotton in two years last week, US government data showed on Thursday, bolstering hopes of renewed demand from the world's No 1 consumer and fuelling worry about tightening nearby supplies.
Prices jumped as much as 1.5 percent in busy early New York trading on the news before reversing course to trade slightly down. Chinese mills and merchants bought 269,300 running bales of upland cotton in the week to May 15, China's biggest weekly total of upland fibre in two years.
Reuters adds: Cotton futures on Thursday tumbled to their lowest since early March as long liquidation and expectations of rains in drought-plagued Texas dragged prices back from a knee-jerk rally on a bullish weekly US government export report. The most-active July cotton contract on ICE Futures US closed down 1.51 cents, or 1.7 percent, at 87.78 cents a lb after a day of whipsawing in an almost three-cent range. Speculator selling jettisoned the spot contract as low as 87.76 cents and to the biggest one-day loss in two weeks.
The following deals reported: 400 bales of cotton from Khairpur at Rs 6700, 200 bales from Vehari at Rs 6925, 300 bales from Mailsi at Rs 6925-7000, 1300 bales of cotton from Rahim Yar Khan at Rs 7000, 600 bales from Mian Chano at Rs 7000-7100 and 400 bales from Ahmedpur at Rs 7200 (credit), dealers said.