LAHORE: The local cotton market on Thursday 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.
Naseem Usman also told that as per media reports Punjab is facing 26 % water shortage at the start of the cotton season. Punjab is getting 52000 qusic water instead of 70,00 qusic water.
ICE cotton futures regained some ground on Wednesday as a sharp reversal in the previous session prompted some mills to buy up the natural fibre, with focus turning to weekly U.S. export numbers.
Cotton contracts for July were up 0.95 cent, or 0.7%, at 139.28 cents per lb by 10:51 a.m ET (1451 GMT). The May cotton contract rose 1.20 cent, or 0.9%, to 140.88 cents.
On Tuesday, cotton shed over 3%, prompting ICE to revert the daily price limit for cotton futures to 5 cents per pound.
“It looks like a rebound after yesterday’s 5-cent drop and probably there is also some mill fixations,” said Jim Nunn, owner of Tennessee-based cotton brokerage Nunn Cotton. “West Texas may have had a shower or two, but nothing very significant.”
Prices have been buoyed of late by concerns over unfavourable weather in top growing regions. Market participants now await the U.S. Department of Agriculture’s weekly exports sales report due on Thursday.
Cotton also found some support from a rebound in oil prices on a drop in US oil inventories and concerns over tighter supplies from Russia and Libya. Higher oil prices make polyester, a substitute for cotton, more expensive. In wider grains markets, Chicago corn was little changed near a 9-1/2-year peak as traders awaited further indications on US planting weather and the impact of war in Ukraine on global supply.
“Investors are also worried about the China shutdown. According to reports, their consumption has gone down,” Nunn added. China is one of the biggest consumers of U.S. cotton.
China’s economy slowed in March as consumption, real estate and exports were hit hard, amid COVID-19 curbs and the Ukraine war.
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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