Lean business was seen on the cotton market on Thursday as major buyers were sidelines due to lack of fresh leads, dealers said. The official spot rate remained unchanged at Rs 6,950, they added. Prices of seed cotton in Sindh per 40 kg low type was unchanged at Rs 2500 while the best quality lost Rs 300 to Rs 2700, in Punjab, easier trend showed no change at Rs 2500 while the good type was down by Rs 100 to Rs 3300, dealers said. In the ready session, over, 3,000 bales of cotton changed hands between Rs 6700-7200, dealers said.
Non-availability is a big factor behind the sluggish business these days and other adding factor is closure of Chinese market due to Lunar New Year, cotton analyst, Naseem Usman said. Other brokers said that the growers were not able to sell their stuff because of poor quality and so that the mills and spinners were facing shortage of fine type, which may make them unable to meet orders on time. Cotton analyst, Naseem Usman said that country needs over 17 million bales to meet local and exports demand, but poor quality of seeds not helping growers to achieve the desired yield.
Reuters adds: ICE cotton eked out small gains on Tuesday, ending two days of losses, even as stocks continued to rise as trade buying offset index and fund rolls ahead of the March contract expiry.
The benchmark March cotton contract on ICE Futures US finished up 0.39 cent, or 0.5 percent, at 85.40 cents a lb. Two days of selling had pushed prices to 84.76 cents on Monday. May futures’ premium over March widened to 68 cents per lb from 56 cents on Monday as indices and funds rolled positions forward ahead of the March expiry on March 7, market participants said.
March options expire on Friday. ICE cotton inched up for a second day on Wednesday on trade buying while dealers awaited a string of government and industry reports due within the several days. Trading volumes were subdued with the benchmark March cotton contract on ICE Futures US closing up 0.12 cent, or 0.1 percent, at 85.52 cents a lb. March prices traded in a tight range of less than one cent throughout the session, supported by the 20-day moving average but never breached the 14-day moving average. The following deals reported as 400 bales of cotton from Vehar sold at Rs 6700-6800, 176 bales from Muzafarabad at Rs 6700, 400 bales from Faqir wali at Rs 6950, 600 bales from Sadiqabad at Rs 7100, 200 bales from Mian wali at Rs 7100, 1000 bales from Rahim Yar Khan at Rs 7125-7150 and 200 bales from Lodhran (BCI) at Rs 7200, they added.