LAHORE: The local cotton market on Saturday 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. He also told that due to increase in the rate of dollar the price of raw material is also increasing.
ICE cotton futures dropped on Friday after the US Department of Agriculture raised its estimate for global production and ending stocks for the 2021/22 marketing year in its monthly supply-demand report.
The cotton contract for May, fell 0.59 cents, or 0.4%, at 132.61 cents per lb by 12:37 ET.
“The WASDE report was mainly neutral with a slightly bearish ting. The world ending stocks went up. It is significant to note that we’ve had an almost continuous decrease in ending stocks and this rise perhaps signals the end to the reduction,” said Rogers Varner, president of Varner Brokerage in Cleveland, Mississippi.
“The USDA did not change or adjust US exports. We also saw China’s domestic consumption fell by half million bales and that was significant.” Month-to-month changes in the global 2021/22 cotton estimates are small, with higher production and lower consumption resulting in an 800,000-bale increase in ending stocks, the USDA said.
“Production is forecast 340,000 bales higher, with increases for Pakistan and Greece. A 500,000-bale decline in China’s expected consumption resulted in a similar decline in the global estimate,” the federal agency added.
Adding further pressure, the dollar rose 0.1% against its rivals, making the natural fibre more expensive for overseas buyers.
The USDA’s weekly export sales report on Thursday showed net sales of 62,900 running bales of cotton for 2021/2022 – a marketing-year low – were down 73% from the previous week and 80% from the prior 4-week average.
Total futures market volume fell by 19,088 to 40,390 lots. Data showed total open interest fell 3,255 to 228,326 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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