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KARACHI (June 11 2010): As a result of reduce consumption and trade locally, the prices may come down on the cotton market in the coming days, dealers said on Thursday. The Karachi Cotton Association (KCA) official spot rate was put at the overnight level at Rs 6,350. In the ready business a deal of 300 bales (exporter to mill) was done at Rs 5,900, they said.
Some analysts commenting on the lacklustre business said that the ginners were hoping better margins for the deals in futures due to bullish sentiment in the world market and short crop, but instead it looks that they may face disappointment.
Because mills are not looking ready to oblige them as they have enough stock to meet the near-term demand, they said. For the last many weeks all cotton trade was stuck up due to tussle between the value-added textile sector and mills over the quota and Regulatory Duty on exports of cotton yarn, they added. It seems, as a result of lean business in the local market, prices may come down in the coming days, they said. Under the circumstance, the ginners may adopt flexible attitude towards the rates, they said.
On Wednesday the US cotton futures' roared up to end at a 10-day high, as several factors conspired to put pressure on the limited supply left for July delivery, including strong Chinese demand, bullish chart signs, and options expiring this week in the money, brokers said. Key July cotton contracts on ICE Futures settled with 3.0 cent, or 3.83 percent, gains at 81.32 cents per lb, a high last visited on May 28. The session low was 78.42 cents from a low at 76.98. July volume was robust at 16,015 lots. The July contract continued putting distance between Monday's low at 75.80 cents a lb, a level last seen February 16. December cotton finished at 77.63 cents a lb, up 1.22 cents, or 1.60 percent. Volume reached 16,887 lots.
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