Cotton prices remain firm despite ginners resorting to panic selling

Prices maintained firm trend on the cotton market on Tuesday despite the fact that the ginners resorted to panic selling to dispose off unsold stock, dealers said. The Karachi Cotton Association (KCA) official spot rate was retained at the overnight level at Rs 8,500, they said.

In Sindh prices of new phutti were quoted at Rs 3550-3600 and for old crop phutti in Sindh and Punjab the rates were of low type at Rs 2500 and that of superior type at Rs 3000, they said. In ready business trading activity improved as over 6000 bales of cotton changed hands between Rs 8500-9000, they added.

According to the market sources the ginners were reluctant to keep the old stock with them as the mills were preferring to purchase fine quality of cotton. On the other hand, in the beginning of the season the quality of cotton is not good, the fine type may be available in the middle of season, they said. The mills and exporters were not ready to purchase low quality of cotton were trying to get better quality for the export purpose, in the meantime, they said. On Monday the US cotton futures closed mixed with late investor sales pressuring new-crop contracts while tight deliverable supplies boosted the spot contract, analysts said.

The key December cotton contract on ICE Futures US lost 2.07 cents to close at $1.3158 per lb, dealing from $1.3017 to $1.3496. The spot July contract climbed 0.92 cent to settle at $1.5095 per lb. Total volume traded on Thursday reached nearly 25,000 lots at 2:42 pm EDT (1842 GMT), some 40 percent above the 30-day norm, Thomson Reuters preliminary data showed.

Texas cotton farmers said some showers fell over the weekend, but they were not enough to provide even some relief from one of the worst dry spells in Texas over the last century. The following deals were reported: 200 bales of cotton from Jahanian sold at Rs 8500, 1000 bales (mill to mill) at Rs 8800, 1400 bales of cotton from Khan Pur at Rs 9000, 200 bales of cotton from Khan Pur at Rs 8500, 200 bales from Sahiwal at Rs 8500, 400 bales from Rahim Yar Khan at Rs 8500, 400 bales from Rahim Yar Khan at Rs 8700, 200 bales from Mailsi at Rs 8700, 100 bales from Burewala at Rs 9000, 480 bales from Layyah at Rs 8500 (one-month credit), 400 bales from Ahmed Pur at 8500, 400 bales from Ali Pur at Rs 9000, 200 bales from Ghotki at Rs 8500 and 200 bales from Haroonabad at Rs 8600.