Modest recovery was seen on the cotton market on Monday as some leading buyers came back to replenish their inventories, dealers said. The official spot rate was unchanged at Rs 5,300, dealers said. In Sindh and Punjab prices of seed cotton were at Rs 1600 and Rs 2800, they said. In the ready business, over 5000 bales of cotton changed hands between Rs 5200 and Rs 5400, they said.
Some experts said that expectations for betterment in the demand, induced spinners and mills to cover their short position. Cotton analyst, Naseem Usman said that as whole uncertainty is persisted because of liquidity crunch. Local stock is not in demand despite the fact the unsold stock of fine quality is very little in size. On the other hand, the growers were still waiting for the payments by the spinners. A huge size of unsold yarn and fabric increasing worries among spinners and low economic condition also a major negative factor for them.
Depressed economic conditions in the textile sector are dominating factor, which not encouraging buyers to make new deals, he added. The following deals reported: 200 bales of cotton from Faqirwali, 750 bales from Haroonabad at Rs 5200, 2000 bales from Rahim Yar Khan at Rs 5250-5500 and 1966 bales from Sadiqabad at Rs 5500, dealers said.