No business activity on cotton market

LAHORE: The local cotton market on Friday 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.

ICE cotton futures extended a sharp rally to scale an 11-year peak on Thursday as India’s move to lift import duties helped the market overlook dismal weekly export sales numbers.

Cotton contracts for July were up 0.79 cent, or 0.6%, at 142.30 cents per lb by 09:15 a.m ET. The May cotton contract on ICE futures rose 0.90 cents, or 0.6%, to 143.67 cents. Both contracts hit their highest since 2011.

“News that India will allow duty free imports to combat the nation’s production shortfall (last season) seemed to help push the market higher,” Louis Rose of Tennessee-based Rose Commodity Group said in a note dated Wednesday.

India on Wednesday allowed duty-free imports of cotton until Sept. 30 as prices in the local market jumped to a record high because of a drop in production, the government said.

In the previous session, ICE cotton futures gained more than 3%. After the price move, ICE expanded the daily price limit for cotton futures to 6 cents per pound.

The US Department of Agriculture’s (USDA) weekly export sales report showed net sales of 59,300 running bales of cotton for 2021/2022 - a marketing-year low- were down 6% from the previous week and 76% from the prior 4-week average. But higher exports were reported to India and Turkey. Further supporting prices, U.S. stock index futures ticked higher.

US corn futures extended gains while wheat was nearly flat, supported by prospects of tight global supply and an uncertain production outlook as the Russia-Ukraine war continued to rattle grain markets.

Total futures market volume fell by 42,450 to 14,645 lots. Data showed total open interest gained 1,174 to 222,080 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