KARACHI: Cotton trading gained momentum at the open market, amid short production of the commodity across the world, a dealer said on Tuesday.
“World cotton markets are reporting short production of the crop this season,” Naseem Usman, a broker at the Karachi Cotton Exchange (KCE), said. “The situation resulted in improvement in the trade turnover and price of the commodity at local markets.”
Traders exchanged a total of 7,700 bales in the session at Rs6,150 to Rs7,200 per maund (37.324 kilograms), the KCE reported. In the previous session, 6,400 bales were traded at Rs6,000 to Rs6,800 per maund, it added.
Meanwhile, the KCE kept its cotton spot rate unchanged at Rs6,750 per maund for the third consecutive working day.
The broker said that India has also reported a decline of 4.53 percent in the crop production in the outgoing season. The situation helped Pakistani markets resume upward trend.
“India is selling cotton at 94-95 cents per pound these days against 82-83 cents per pound a couple of months ago,” he said, adding that the import of cotton from India, if takes place, will cost more to importers.”
However, the price of the commodity may decline in the days to come if the United States imposes economic sanctions on Pakistan if it continues to lay down gas pipeline from Iran.
Faqir Wali witnessed the highest trade of 2,200 bales at Rs6,375 to Rs6,500 per maund; Sadiqabad traded 1,400 bales at Rs7,000 per maund; Rahim Yar Khan traded 1,000 bales each at Rs7,200 per maund on credit; and other markets of the country traded the minimum of 300 bales and the maximum of 600 bales, the KCE said.
At New York cotton market, May futures contract dropped by 0.16 cents per pound to 86.72 cents, while July futures contract trimmed by 0.08 cents per pound to 87.49 cents, the KCE reported. However, China cotton index increased by three points to 19,349 points, it added.