Cotton market: Buyers remain sideline in absence of motivating factors

LAHORE: The local cotton market on Friday remained dull while the trading volume remained low.

Cotton Analyst Naseem Usman told that the rate of cotton in Punjab and Sindh is in between Rs 18000 to Rs 20,000 per maund. He also told that due to increase in the rate of the dollar the price of raw material is also increasing.

Pakistan’s exports of textile products increased 21 per cent Y-o-Y to $1.65 billion in March 2022 compared to $1.36 billion in March 2021, informs All Pakistan Textile Mills Association (APTMA). Strong demand in the West before the summer season gave a huge boost to Pakistan’s textile exports during the period while other factors like resumption of economic activities led to a shortage of various retail brands, competitive utilities and borrowing rates.

On a sequential basis, Pakistan’s textile exports dropped by 2.3 per cent M-o-M, compared to $1.69 billion in February 2022. Cumulatively, textile exports surged by 26 per cent Y-o-Y to $14.26 billion in 9MFY22 compared to $11.36billion in 9MFY21.

ICE cotton futures slipped on Thursday, hurt by a weak export sales report as focus turns to a closely watched monthly supply and demand report from the U.S. Department of Agriculture (USDA).

The most active May cotton contract on ICE futures was down 0.99 cent, or 0.7%, at 134.70 cents per lb at 11:13 a.m. ET. Prices traded within a range of 134.15 and 136.46 cents a lb.

The USDA’s weekly export sales report showed net sales of 62,900 running bales of cotton for 2021/2022 — a marketing-year low — were down 73% from the previous week and 80% from the prior 4-week average.

“We have had a mixed session. The export sales report was bad, which was expected. Also, we saw some cancellations from China,” said Jack Scoville, vice president at Chicago-based Price Futures Group. China is one of the top consumers of US cotton.

All eyes are now on the USDA’s monthly World Agricultural and Supply Demand Estimates (WASDE) report due on Friday.

Brent oil futures turned negative after rising by $2 a barrel earlier in the session. Lower oil prices make polyester, a substitute for cotton, less expensive. Chicago wheat, corn, and soybean futures were little changed as traders awaited USDA data to gauge the potential impact of the war in Ukraine and planting trends in the United States.

Total futures market volume fell by 19,708 to 24,141 lots. Data showed total open interest fell 1,683 to 231,581 contracts in the previous session.

The Spot Rate remained unchanged at Rs 20,500 per maund. Polyester Fiber was available at Rs 290 per kg.

Copyright Business Recorder, 2022