Violence hits trade activity on cotton market

Trading activity on the cotton market almost came to a halt in the metropolis on Thursday, as violence erupted following the remarks by a politician, dealers, who could not reach at their workplace informed when contacted on phone As a result, the Karachi Cotton Association (KCA) official spot was not issued, therefore no change was recorded in the rate at Rs 6,200, they said.
Seedcotton rates in Sindh were higher by Rs 200-300 to Rs 2900-3000, prices in Punjab followed the same pattern, picking up Rs 300 to Rs 2700-2800, they said. In the ready business, not a single bale was bought or sold, dealers said. According to some brokers in the Punjab, some of the growers were not indulging in panic selling of phutti thinking that it is just starting of the new season, why they should make hurry, they must avoid aggressive selling.
This was the major reason behind the stability of the prices and partly because of rise in the NY cotton market, they said. It is just beginning of the season, there are a lot of things in the way, particularly weather condition, right now, how one can decide oneself about the outcome, they said. On Wednesday the NY cotton futures closed higher on investor short-covering as the market recovered from a fall to a nine-month low after US Federal Reserve Chairman Ben Bernanke raised the possibility of more stimulus which alleviated for now worries of a flagging global economy.
Cotton had tracked losses in other commodity markets due to fear the euro zone debt crisis would spread like a disease and damage economic growth, which would then have a knock-on effect in depressing cotton demand, analysts said. Stocks, commodities and the euro rose after Bernanke said the Fed could provide more stimulus if recovery stalls. The key December cotton futures on ICE Futures US rose 4.07 cents or 3.90 percent to finish at $1.0846 per lb, dealing from $1.0444 to $1.0885.
On Tuesday, the contract ended at $1.0439 per lb, the lowest close for the second position cotton contract since early October 2010, Thomson Reuters data showed. Volume traded was almost 15,000 lots at 2:51 pm EDT (1851 GMT), almost a quarter below the 30-day norm, Thomson Reuters preliminary data showed.