LAHORE: The Spot Rate Committee of the Karachi Cotton Association (KCA) on Thursday increased the spot rate by Rs 500 per maund and was available at Rs 20,500 per maund.
Cotton Analyst Naseem Usman told Business Recorder that dullness prevails in the local cotton market while the trading volume remained low. He also told that rate of cotton in Punjab and Sindh is in between Rs 18000 to Rs 20,000 per maund. 1350 bales of cotton of Khairpur were sold at Rs 21100 per maund.
ICE cotton futures rose more than 2% on Wednesday, supported by firm demand and worries over supply shortfalls due to drought conditions in key growing areas, while a weaker dollar added to the upbeat mood.
The first-month contract on ICE futures for May was up 2.77 cents, or 2%, at 139.58 cents per lb, by 11:13 a.m. EDT (1513 GMT). It traded within a range of 136.36 and 139.82 cents a lb.
“Demand has been strong, but recent reports relay slowing yarn sales and building inventories, which is not supportive,” Louis Rose of Tennessee-based Rose Commodity Group said.
“However, the overall sentiment is bullish, this is mostly due to the drought across West Texas, Oklahoma, and southern Kansas. We think (cotton) prices will remain elevated ahead of Thursday’s reports.”.
The US Department of Agriculture’s planting intentions report and weekly export sales report are scheduled for release on Thursday. A Reuters poll forecasts US cotton acreage at 12.007 million acres for the 2022/23 marketing year.
The US dollar dropped 0.7% to a near one-month low, making cotton less expensive for other currency holders.
A rebound in oil prices also lifted cotton’s appeal as it makes substitute polyester more expensive. Chicago wheat edged lower on Wednesday, consolidating after sliding a day earlier as traders weighed peace talks between Russia and Ukraine and turned their attention to the northern hemisphere growing season.
Total futures market volume fell by 22,131 to 16,135 lots. Data showed total open interest fell 868 to 227,449 contracts in the previous session.
The Spot Rate Committee of the Karachi Cotton Association on Thursday increased the spot rate by Rs 500 per maund and was available at Rs 20,500 per maund. Polyester Fiber was available at Rs 288 per kg.
Copyright Business Recorder, 2022