Cotton prices up on renewed buying interest

At cotton market on Thursday buyers seen chasing quality cotton in order to build up their inventories. This renewed buying interest pushed the cotton prices up to the seasonal peak level of Rs.7,000 per maund. Due to intense demand, prices on ready counter touched Rs7,000 per maund while official spot rates were increased by Rs100 to Rs6,600 per maund.

Short supply and fears of crop failure kept buyers panicky. There was strong demand but most deals could not be finalised owing to quality constraints.
Couple of days back it was buyers market as they were dictating their terms but a sudden twist in situation has made it a sellers’ market, observed a leading cotton broker.

The rapidly changing trading pattern is keeping textile industry in a fix with worries over import parity and its competitiveness in the world market. If the industry lifts cotton at higher rate, spinners would face difficultly in exports of yarn.

Spinners were also seen for the first time simultaneously tapping domestic and foreign markets to build up cotton inventories. Meanwhile, the value-added textile industry has complained of higher yarn prices in the domestic market.

Major deals reported to have materialised on ready counter were 1,000 bales, Ghotki, at Rs7,000; 2,400 bales, Daharki, at Rs7,000; 600 bales, Panno Aqil, at Rs7,000; 400 bales, Khanpur Mehar, at Rs7,000; 400 bales, Mirpur Mathelo, at Rs7,000; 2,400 bales, Rohri, at Rs6,500 to Rs6,700; 2,600 bales, Saleh Pat, at Rs6,600 to Rs6,750; 3,000 bales, Khairpur, at Rs6,500; 2,400 bales, Mian Channu, at Rs6,800 to Rs7,000; 1,200 bales, Rajanpur, at Rs7,000; 2,200 bales, Sadiqabad, at Rs6,900 to Rs7,000; 1,000 bales, Jalalpur, at Rs6,950; 1,000 bales, Shadan Lund, at Rs6,750 to Rs6,800; 1,200 bales, Taunsa, at Rs6,750 to Rs6,800; and 600 bales, Fazilpur, at Rs7,000.

At the Karachi Cotton Exchange on Thursday normal trading continue, while spot rates increased Rs100/maund. The spot rates rose to Rs6,600/maund (37.324kg) and Rs7,073/40kg. Ex-Karachi rates also increased to Rs6,745/maund and Rs7,228/40kg after an addition of Rs145 and Rs155 as upcountry expenses, respectively.

According to an analyst, the spot rates increased due to increasing demand by spinners. The market is likely to remain stable in the coming days, as demand will stay.