Prices came down further on the cotton market on Tuesday owing to lack of buying interest, dealers said. The official spot rate was down by Rs 100 to Rs 4,650, dealers said. In the ready session, around 4,000 bales of cotton changed hands between Rs 4100 and Rs 4800, they said. The seed cotton rates in Sindh at Rs 1600 and Rs 2300, in Punjab prices were at Rs 1700 and Rs 2500, they said.
Market sources said that sluggish trend in the overseas market not encouraging local buyers to take part in business activity, besides, electricity crisis also a big problem for the exporters and spinners. They said that they did not observe any kind of positive impact of rate cut on the business activity, just volume of business on the stock market is showing significant improvement. It is interest to note that how the market react the news that India kicked off a sale of government cotton stockpiles, putting a first tranche of 5,100 bales up for auction. The state-run Cotton Corp of India (CCI) is being forced to sell cotton into a weak market as it struggles to store purchases of around 5 million bales made in the current crop season. It typically sells stocks in phases through electronic auctions.
Reuters adds: ICE cotton rebounded off a near 5-1/2-year low hit the previous session to rise the most in 8-1/2 weeks on Monday as speculators covered short positions in response to the Commitment of Traders report released Friday after market close. The most-active front-month March cotton contract on ICE Futures US gained 1.32 cents, or 2.3 percent, to settle at 58.62 cents a lb for its largest single-session gain since November 26, 2014.
The following deals reported: 400 bales from Mirpurkhas at Rs 4100, 1000 bales from Kump at Rs 4600, 200 bales from Saleh Pat, same figure from Rohri, same figure from Dharanwala, 400 bales from Faqirwali all done at the same prices, 600 bales from Haroonabad at Rs 4625, 400 bales from Gojra at Rs 4800 and 100 bales from Vehari at the same rate, they added.