A kind of panic buying seen on the cotton market on Tuesday as mills and spinners made a beeline for all fine quality to meet their needs, dealers said. The official spot rate was sharply higher by Rs 100 to Rs 5,450 dealers said. In the Punjab, seed cotton prices were at Rs 2600 and Rs 3200, they said. In the ready business, nearly 13000 bales of cotton changed hands between Rs 5000 and Rs 5750, they said.
Commenting on the see-saw-attitude of the market, cotton analyst, Naseem Usman said that, a likely rise in the prices propelled them (buyers) to make forward deals. He said that cautious buyers were under pressure due to reports that China to sell cotton at higher rates on quality reason. It appeared that prices of cotton are rising with the passage of time, apparently because of fall in Indian cotton production, other experts said.
According to the US trade sources, a move likely to hit demand for the world’s top exporter in a key market at a time of weak prices and lacklustre demand, Turkey has decided to slap anti-dumping duties on imports of cotton from the United States.
Reuters adds: Cotton futures on Monday rose to their highest level in over two months and registered their biggest one-day gain in more than eight months on short covering amid reports of severe weather in South Texas. There was muted reaction to China’s announcement last week that it will hold sales to reduce state reserves, which may have inspired investors to follow Asian traders in covering their short positions, said Peter Egli, director of risk management at British merchant Plexus Cotton.
The July cotton contract on ICE Futures US settled up 2.21 cent, or 3.68 percent, the biggest percentage gain since August last year, at 62.23 cents per lb, after trading as high as 62.45.
Total futures market volume rose by 12,327 to 66,372 lots. Data showed total open interest fell 10,847 to 195,174 contracts in the previous session. The following deals reported: 600 bales of cotton from Ghotki at Rs 5750, 2500 bales from Ranipur at Rs 5000, 600 bales from Rohri at Rs 5050, 400 bales from Channi Goth at Rs 5500, 1200 bales from Jalalpur at Rs 5500-5600, 600 bales from Rahim Yar Khan at Rs 5400, 400 bales from Bahawalpur at Rs 5057, 400 bales from Lodhran at Rs 5250, 4530 bales from Mianwali at Rs 5700-5730 and 400 bales from Shujabad at Rs 5600, they said.