Cotton prices may touch Rs 5,000 in near future

RECORDER REPORT
KARACHI (January 06 2010): Continued upward march on the cotton market is an indication that the prices may hit the new high at Rs 5,000 on the cotton market in the near future, dealers said. The Karachi Cotton Association (KCA) official spot rate maintained surge, rising Rs 50 more and hitting the new high at Rs 4,650, dealers said.

Picture was not different on the ready business as prices climbed with a rise of nearly Rs 100 to 4550-4800 where approximately, 10,000 bales changed between Rs 4550-4800. In the meantime, phutti prices did not show any change in Sindh and the Punjab, to Rs 2200-2450, they said. Commenting on the present direction in the market, some experts said that despite the expectations that the cotton production to exceed the target of 12.1 million bales, still it falls short of the requirement.

Import of cotton to meet the local demand would be a must, which may be costlier as dollar is going to cross the barrier of 85, they added. Besides, high prices could spark an increase in cotton plantings in 2010 although competition for acres will be stiff from pricier grain crops, an official with the industry group National Cotton Council said.

"The recent improvement in cotton prices has placed cotton in a more competitive position than any time since the 2006 season," NCC President Mark Lange said in an interview at the annual Beltwide Cotton Conference in New Orleans.

Other report showing that the world cotton output is forecast to rise 10 percent, or 1.9 million tonnes, to 24.2 million tonnes in 2010/11, led by larger production from China, an international farm group said on Monday. The International Cotton Advisory Committee (ICAC) secretariat said in a monthly report that production in China is forecast at 7.7 million tonnes, an increase of 1 million tonnes from the current 2009/10 season.

In first trade of 2010 the NY cotton futures settled higher on the back of a weak dollar and broad gains in other commodities, but selling pressure by growers limited the advance, brokers said. The key March cotton contract rose 0.4 cent to close at 76 cents per lb, trading from 75.67 to 76.77 cents. Volume traded in the March contract hit 10,341 lots at 2:29 pm EST (1929 GMT).

THE FOLLOWING DEALS WERE REPORTED: 400 bales of cotton from Mirpurkhas sold at Rs 4600, 1400 bales from Shahdadpur at Rs 4600-4650, 400 bales from Dadu at Rs 4600, 200 bales from Tando Adam at Rs 4650, 400 bales from Jhole at Rs 4650, 1000 bales from Khair Pur at Rs 4700, 200 bales from upper Sindh at Rs 4800, 1000 bales from Rahim Yar Khan at Rs 4800, 1200 bales from Rahim Yar Khan at Rs 4750, 600 bales from Sadiqabad at Rs 4750, 400 bales from Khanewal at Rs 4750, 400 bales from Kabirwala at Rs 4750, 200 bales from Haroonabad at Rs 4625, 400 bales from Dunia Pur at Rs 4550, 800 bales from Muridwala at Rs 4550, 400 bales from Mangi Bangla at Rs 4550 and 400 bales from Gojra at Rs 4550.