LAHORE: The local cotton market on Wednesday remained steady after Eid holidays. The trading volume remained low.
Cotton Analyst Naseem Usman told Business Recorder that the trading activity remained dull due to the rains.
The rate of cotton in Sindh is in between Rs 14,500 to Rs 15,500 per maund. The rate of cotton in Punjab is in between Rs 15,500 to Rs 16000 per maund. The rate of Phutti in Sindh is in between Rs 5000 to Rs 6000 per 40 Kg. The rate of Phutti in Punjab is in between Rs 5500 to Rs 6500 per 40 Kg
ICE cotton fell more than 4% to trade limit down on Tuesday, pressured by a rampant dollar and expectations of lower demand for the natural fiber, especially from top buyer China.
The most-active December contract on ICE Futures fell 3.82 cents, or 4.03%, to 90.92 cents per lb as of 02:30 p.m. ET. It traded within a range of 90.84 and 94.9 cents a lb.
“There’s a lot of recessionary fears out there and the dollar has been trending a little higher macro economic problems and fears of Chinese demand are what’s really ruling the market right now,” said Jack Scoville, vice president at Chicago-based Price Futures Group. The dollar scaled a 20-year high, making the natural fiber more expensive for overseas buyers.
“China announced overnight that it has reduced its import forecast for this year to approximately 8M bales amid COVID shutdowns; China also has reduced its overall consumption estimate to 36M bales. Each of these factors is, of course, bearish,” Louis Rose of Tennessee-based Rose Commodity Group wrote in a note. China is one of the biggest consumers of US cotton.
China’s agriculture ministry lowered its estimates for cotton consumption in 2021/22 by 200,000 tonnes based on weak demand from textile makers.
Investors also took stock of the US Department of Agriculture’s (USDA) monthly supply and demand report that projected lower US 2022/23 cotton production, exports and ending stocks than last month’s forecast.
“Continued below-average precipitation - primarily in Texas - means abandonment is projected higher this month, nearly 4 times the previous year’s level,” the USDA report added.
Meanwhile, data from the USDA showed that as of July 10, 39% of the cotton acreage was rated in good-to-excellent condition, down from 56% at the same time last year.
The Spot Rate remained unchanged at Rs 16000 per maund. The Polyester Fiber was available at Rs 325 per kg.
Copyright Business Recorder, 2022
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