LAHORE: The local cotton market on Wednesday remained dull while the trading volume remained low. Cotton Analyst Naseem Usman told that the rate of cotton in Punjab and Sindh is in between Rs 18000 to Rs 21,000 per maund. He also told that due to increase in the rate of dollar the price of raw material is also increasing.
ICE cotton futures rose 3% on Tuesday, driven by mill fixations and supply worries amid a drought in key growing regions, while a risk-on sentiment in broader markets added to the upbeat mood.
Cotton contracts for July rose 3.25 cent, or 2.4%, to 136.70 cents per lb by 11:25 a.m EDT. The May cotton contract on ICE futures was up 2.65 cents, or 2%, at 137.94 cents.
“There is still a lot of mill fixations left... The large number of on-call position and worries about the new crop due to the weather are helping the prices,” said Jim Nunn, owner of Tennessee-based cotton brokerage Nunn Cotton.
The US Department of Agriculture (USDA) in a weekly crop progress report on Monday said 7% of the cotton was planted in the week ended April 10, compared with 4% the week before.
Oil prices climbed as Shanghai’s relaxation of some COVID-19 restrictions eased concerns about Chinese demand and as OPEC warned it would be impossible to replace potential supply losses from Russia.
Higher oil prices make polyester, a substitute for cotton, more expensive. The Nasdaq led Wall Street’s main indexes higher after data showed consumer prices rose largely in line with estimates.
“Chinese consumption (of U.S. cotton) may fall but demand from other places still seems strong. However, these higher prices are probably going to curb some demand,” Nun said.
Total futures market volume fell by 31,045 to 28,405 lots. Data showed total open interest fell 1,106 to 220,016 contracts in the previous session.
The Spot Rate remained unchanged at Rs 20,500 per maund. Polyester Fiber was available at Rs 290 per kg.
Copyright Business Recorder, 2022
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