Small business seen on cotton market

LAHORE: Modest trading activity was witnessed in the local cotton market on Friday.

Cotton analyst Naseem Usman told Business Recorder that Spot Rate remained unchanged. He also told that rate of cotton in Punjab and Sindh is in between Rs 18000 to Rs 20,000 per maund.

1000 bales of Rahim Yar Khan were sold at Rs 199900 per maund and 800 bales of Dera Ghazi Khan were sold at Rs 20,800 per maund.

Cotton Analyst Naseem Usman told that ICE cotton futures rose more than 1% on Thursday, with the May contract hitting a two-week high on Thursday, after a federal weekly exports sales report showed strong buying activity.

The most active May cotton contract on ICE futures rose 1.90 cent, or 1.6%, to 121.70 cents per lb, at 11:16 a.m. ET. The US Department of Agriculture’s weekly export sales report showed net sales of 371,400 running bales of cotton for 2021/2022, up 5% from the previous week and 34% from the prior 4-week average. Increases were primarily for China.

The export sales report highlighted strong demand for US cotton and that is helping prices, said Louis Barbera, partner and analyst at VLM Commodities Ltd.

“Chinese demand for U.S. cotton will continue to be strong. China grows cotton at a deficit every single year, so they will have to buy their deficit back. “The dollar index fell 0.5% against its rivals, making the natural fiber more appealing to other currency holders.

Further adding support, oil prices climbed 7% after the International Energy Agency said three million barrels a day (bpd) of Russian oil and products could be shut in from next month.

“If oil prices were to stay up, cotton demand will be even greater. Polyester has been in a downward spiral in terms of consumption due to the prices of the inputs which is petroleum,” Barbera added.

US stocks edged higher after a sharp rally in the previous session as the Federal Reserve raised interest rates, while investors closely tracked the Russia-Ukraine peace talks.

Meanwhile, Chicago wheat futures were mixed while corn and soybeans rose.

Total futures market volume fell by 7,740 to 11,800 lots. Data showed total open interest gained 352 to 220,610 contracts in the previous session.

The Spot Rate remained unchanged at Rs 20,000 per maund. Polyester Fiber was available at Rs 285 per kg.

Copyright Business Recorder, 2022