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KARACHI (August 06 2010): Trading activity picked up on the cotton market on Thursday as mills continue forward buying in anticipation of further rise in the rates, dealers said. The Karachi Cotton Association (KCA) official spot was raised by Rs 200 to Rs 6,500 due to short supply position, they said.
In the ready business, approximately 5000 bales of cotton changed hands between Rs 6200-6800, they said. Phutti prices were higher as rates in Sindh were at Rs 2550-2650 and in Punjab at Rs 2800-3100, they added. Commenting on the fresh situation on floods, Naseem Usman said that the market will move on demand and supply factor as according to initial reports country is facing a loss of nearly Rs 10 billion as a result of damage to crop by floods.
In Punjab both cotton quality and quantity, in Sindh, cotton quality has been hurt by the recent floods, this factor may affect prices in the coming days, some other brokers said. On the other hand, the ginners, who missed the new high rate at Rs 7000, now hoping they would get the highest rate under the circumstances, they said.
On Wednesday the NY cotton futures finished lower on trader and producer sales as investors mull whether prices could rally further or technical factors may undermine the market in the days ahead, dealers said. ICE Futures US benchmark December cotton contract slipped 0.33 cent to end at 79.47 cents per lb. On Tuesday, the contract closed at 79.80 cents in the loftiest settlement close for the second position contract since June 25, according to Thomson Reuters data.
December traded from 78.97 to 79.95 cents. The spot October cotton contract eased 0.51 cent to finish at 84 cents. October enjoys a 4.53 cents premium over December, down from the 4.71 cents premium in the previous session. Volume traded in the December contract reached 8,551 lots at 2:40 pm EDT (1840 GMT).
The following deals were reported: 600 bales of cotton from Shahdadpur sold at Rs 6200, 200 bales of cotton from Hyderabad at the same rate, 400 bales of coton from Tando Adam at the same rate, 200 bales from Jhang at Rs 6600, 1000 bales from Burewala at Rs 6600-6800, 600 bales from Kabirwala at Rs 6600-6700, 200 bales from Bhowana at Rs 6600, 400 bales from Mian Channnu at Rs 6600-6700, 400 bales from Sahiwal at Rs 6650, 200 bales of cotton from Khanewal at Rs 6650 and 400 bales from Chichawatni at Rs 6650-6700.
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