On the back of short supply and persistent demand for quality lint, prices has gain further at the cotton market on Thursday. In the recent session, the prices touched the season's high rate at Rs 5750 due to panic buying, dealers said.
According to market sources, short supply helped the rates to go up further as the ginners were interested in present selling on expectations of better rates in the near future. The interesting thing is that the ginners have not much quality lint but they are to hold back, not making deals in a big ways.
The official spot rate also picked up more Rs 50 to Rs 5,450 dealers said. In the Punjab, prices of seed cotton were at Rs 2800 and Rs 3150 while in the ready business, nearly 2000 bales of cotton changed hands between Rs 5500 and Rs 5700, dealers said.
As per cotton analyst, Naseem Usman, prices are soaring as very little quantity of high-grade lint left with the ginners. In fact, global trend influenced the domestic market and it looks, prices may rise further on the back short supply against strong demand.
The following deals reported by dealers to have changed hands: 400 bales of cotton from Ghotki sold at Rs 5500, 200 bales from Burewala at Rs 5550, 1000 bales from Rahim Yar Khan at Rs 5700 and 400 bales from Yazman Mandi at Rs 5700.
According to the reports, India's crucial monsoon rains are expected to be above average in 2016, easing fears over farm and economic growth after two straight droughts hit rural incomes and agricultural output. Following this news, it is also likely that the cotton production to pick up, so that cotton importing countries to get rid of short position.
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