KARACHI: Cotton trading remained firm ahead of the likely rain in some parts of Punjab that might damage the standing crop, a dealer said on Wednesday.
“The rain for the next three days, if occurred, would damage the crop in some parts of Punjab,” Taqi Abbas, a member of the Advisory Committee of the Karachi Cotton Association, said.
“The situation may shoot the cotton price up to Rs7,000 per maund (37.324 kilograms) as per the market expectation.”
High quality cotton is being traded at Rs6,400 to Rs6,600 per maund on cash, while the same quality cotton is being sold at Rs6,600 to Rs6,700 per maund on credit, he said.
The rains might further widen gap between the demand and supply of the commodity, he said. “Spinning mills are having high demand for quality cotton, which is available in market in low quantity. The situation suggests maintenance of upward trends in cotton price in the days to come.” Pakistan is estimated to produce 13.2 to 13.3 million bales (155 kilograms each) this fiscal year (July 2012 to June 2013) against 14.8 million bales produced last year, he said.
The upward trends at New York cotton market also supported price hike of the commodity at the local market.
Meanwhile, March futures contract increased by 0.86 cents per pound to 82.18 cents, while May futures contract enhanced by 0.94 cents per pound to 84.13 cents, the Karachi Cotton Exchange (KCE) reported.
The KCE; however, kept its cotton spot rate unchanged for the second consecutive working day at Rs6,350 per maund.
Traders exchanged a total of 7,000 bales at Rs5,800 to Rs6,600 per maund (37.324 kilograms), the KCE reported.
One thousand bales was the maximum trade turnover of cotton that took place at Haroonabad at Rs6,450 per maund; while Hasilpur and Mianwali traded 800 bales each at Rs6,250 to Rs6,550 per maund, it said.
Saleh Pat, Raqir Wali and Rahim Yar Khan traded 600 bales each at Rs6,275 to Rs6,600 per maund; Rahri, Mongi Bangla, Mamo Kanjan, Layyah, Fazilpur and Rahim Yar Khan traded 400 bales each at Rs5,900 to Rs6,500 per maund and Sahiwal traded 200 bales at Rs5,800 per maund, it added.