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 20,000 per maund. 1350 bales of cotton of Khairpur were sold at Rs 21100 per maund.
ICE cotton futures eased on Tuesday as a dip in equity markets and a stronger dollar weighed on investor sentiment towards the natural fibre.
The most active May cotton contract on ICE futures was down 0.50 cent, or 0.4%, at 137.44 cents per lb at 11:13 a.m. ET. Prices traded within a range of 136.86 and 140.45 cents a lb.
“The cotton market is getting a little tired... It is following the outside markets. The stock market is down and the dollar is stronger,” said Keith Brown, principal at Keith Brown and Co in Georgia.
Wall Street’s main indexes fell after U.S. Federal Reserve Governor Lael Brainard said she expects rapid reductions to the central bank’s balance sheet, spooking investors already on edge about the prospect of fresh sanctions on Russia.
The dollar index was up 0.3%, making cotton more expensive for overseas buyers.
Oil prices steadied in volatile trade as growing worries about coronavirus demand destruction offsets supply concerns as the United States and Europe plan to impose new sanction on Russia for alleged war crimes in Ukraine. Lower oil prices make polyester, a substitute for cotton, less expensive.
“We need to see big (cotton) shipment and sales numbers going forward to keep the fire going,” Brown added.
Last week, the U.S. Department of Agriculture (USDA) released weekly export sales data that showed net sales of 234,000 running bales of cotton for 2021/2022, down 24% from the previous week.
All eyes are now on the USDA’s monthly World Agricultural and Supply Demand Estimates (WASDE) report due on Friday.
Total futures market volume fell by 6,888 to 20,566 lots. Data showed total open interest gained 1,810 to 230,415 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