Short supply caused increase in the spot rate further on the cotton market on Tuesday and now it looks that prices may take a technical breather because rates are almost equal against the international market rates, dealers said.
Official spot rate was increased by Rs 100 more to Rs 6100, they said.
Prices of seedcotton in Sindh were at Rs 2200 while the better type gained Rs 100 to Rs 2500, in the Punjab, trend was same as cottonseeds low type was unchanged at Rs 2200 but the best enhanced by Rs 100 to Rs 2900, they said.
In ready business, 4000 bales of cotton changed hands between Rs 6000-7000, they added.
According to the market sources, it looks that prices are near to close at their saturation point as rates of cotton are same in the global market.
Sharing the same views, Naseem Usman said that local mills may be attracted by international stuff due to no difference in the rates.
Exporters were also selling cotton to mills and mills were also selling the stuff to mills, other experts said.
Under the circumstances, the ginners are most benefited as they are gaining maximum profits as a result of short supply position, they said.
According to the Reuters, the NY cotton futures closed at a three-week high on Monday on investor buying on the likelihood of small deliveries in the spot May contract as it goes into first notice day at the close of business on Monday, analysts said.
The July cotton contract on the ICE Futures US exchange rose 1.47 cents or by 1.6 percent to finish at 92.48 cents per lb, dealing from 90.51 to 92.84 cents.
It was the loftiest close for the second position contract since April 3.
May’s open interest fell 2,930 lots to 1,608 lots as of last Friday, equivalent to 167,500 (480-lb) bales of cotton.
On a benchmark basis, the cotton contract has remained trapped in a range between 87 and 94 cents since the start of March, Thomson Reuters data showed.
Monday’s estimated volume was near 19,200 lots, about a fifth under the 30-day norm, according to Thomson Reuters data.
The following deals were reported: 1000 bales of cotton from Mohammad Pur Dewan sold at Rs 6000, 200 bales from Multan at the same rate, 800 bales from Layyah at Rs 6300-6900, 200 bales from Basti Malook at Rs 6400, same figure from Mailsi at Rs 6450, same number from Sadiqabad at Rs 6500, same number from Yazman Mandi at the same rate, same figure from Lodhran at Rs 6525, same figure from Khanewal at Rs 7000 and 600 bales of cotton (mill to mill) at the same amount.