Short crop news in overseas market pushes up local cotton prices

RECORDER REPORT

KARACHI: Shortage of cotton in the international market due to several factors and owing to long-weekend ahead of Muharram holidays strengthened the local prices on the cotton market on Friday, dealers said

The Karachi Cotton Association (KCA) official spot rate was unchanged at Rs 5,400, they said. Prices of seed-cotton in Sindh were at Rs 1,800-2,300 and in Punjab rates were at Rs 2,000-2,600, they said. In ready dealings prices went up as approximately 40,000 bales of cotton changed hands at Rs 4,000-5,450, they said.

Market sources said that the feature of the day was speculative buying of cotton as mills showed fresh interest in buying due to rising apprehensions about increase in the prices after the news of less cotton production in India and China. Beside, the mills and spinners made some panic buying of cotton due to long-holidays on account of Muharram.

Some analysts were of the major cotton producing countries likely to face shortage problem as growers are cutting down cultivation areas after recent sharp fall in the cotton rates. Rising trend in the dollar's value is also factor behind the handsome business.

On the other hand, the ginners captured the time and sold cotton at the prevailing level amid fears about the fall as a result of good cotton production in the country for the current season, they added.

Many traders were of the view that cotton growers may shift their position by cultivating other crop, which are more or less profitable due to recent fall in the cotton rates.

Reuters added: On Thursday, the NY cotton futures settled firmer on buying by small investors in a range-bound market and fibre contracts are seen drifting into the weekend given a lack of leads at this time, brokers said.

Key March cotton futures rose 0.39 cent to finish at 91.30 cents per lb, trading from 90.83 to 92.77 cents. It was an inside day since the range was within Wednesday's 90.70 to 93.67 cents band.

The market has staged a modest rebound since hitting a session low of 88.50 cents on Tuesday in the lowest intra-day level for the second position contract since the start of Sept. 2010, Thomson Reuters data showed.

Total volume traded Thursday amounted to more than 12,500 lots, almost 50 percent under the 30-day norm, preliminary Thomson Reuters data showed.

The following deals were reported: 200 bales of cotton from Shahdad Pur at Rs 4000, 1000 bales of cotton from Nawab shah at Rs 4400/4500, 400 bales of cotton from Dadu at Rs 4650, 800 bales of cotton from Khair Pur 4700/4750, 2000 bales of cotton from Upper Sindh at Rs 5150/5200, 600 bales of cotton from Uch Sharif at Rs 5300, 1000 bales of cotton from Lodhran at Rs 5300, 1000 bales of cotton from Rajan Pur 5400, 600 bales of cotton from Ali Pur at Rs 5300/5400, 6000 bales of cotton from Khanewal at Rs 5200/5300, 800 bales of cotton from Lahya 5300, 2000 bales of cotton from Khan Pur at Rs 5300, 2000 bales of cotton from Ahmed Pur at Rs 5300, 5000 bales of cotton from Bahawal Pur at Rs 5200/5300, 2000 bales of cotton from Mian Wali at Rs 5450, 2000 bales of cotton from Chistian at Rs 5075/5100, 3000 bales of cotton from Burewala 5200, 800 bales of cotton from Hasil Pur at Rs 5100, 1000 bales of cotton from Haroonabad 5100, 1000 bales of cotton from Vehari at Rs 5250/5300, 1200 bales of cotton from Fort Abbas at Rs 5100/5150, 600 bales of cotton from Bahawal Nagar at Rs 5075-5100, 600 bales of cotton from Chichawatni at Rs 5150/5200, 600 bales of cotton from Sahiwal at Rs 5100/5150, 400 bales of cotton from Yazman Mandi at Rs 5200, 1400 bales of cotton from Rahim Yar Khan at Rs 5300-5400 and 3000 bales of cotton from Sadiqabad at Rs 5300, they said.