Firm trend obtains on cotton market amid modest trade activity

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Weekly Updates - Traders' Diary

Falling trend in the NY cotton futures forced the mills to sidelines on the cotton market on Thursday.

In the meantime, exporters continued purchasing to meet the foreign demand, dealers said.

The official spot rate was unchanged at Rs 5400, they added.

Prices of seedcotton in Sindh were inert at Rs 1700-2300, respectively, and in the Punjab were at Rs 2000-2700, they said.

In the daily turnover approximately 3200 bales of cotton changed hands between Re 5000-5800, they added.

Naseem Usman said that trading activity came down after decline in the NY cotton market but prices showed steady trend due to short unsold stock position.

It is expected that rates may not fluctuate sharply because decline in fine quality with the passage of time, he said.

The exporters were looking somewhat active in covering the short position, but they were cautious about the quality of cotton to meet the exports requirement, other brokers said.A report appeared last day that India has decided to build cotton reserves of 2.5 million bales of 170 kg each to meet the needs of the domestic textile industry.

To ensure stability of prices, the state-run Cotton Corporation of India (CCI) has been directed to intervene in the market to ensure stability of prices.According to the Reuters the NY cotton futures slid with other commodity markets on Wednesday, falling from 2.20 to more than 3.50 percent to 10-day lows after the release of Federal Reserve minutes that indicated it was unlikely there would be more economic stimulus measures.On Wednesday, funds were thought to have unwound some of the long cotton positions taken out last week, which pushed prices into overbought territory on the price charts.

The benchmark May contract on ICE Futures US slid 3.32 cents, or 3.58 percent, to end at 89.32 cents per lb, in a range extending from 88.92 to 92.64 per lb.

The contract volume came to a hefty 20,121 lots.

New-crop December dropped 2.52 percent to close at 88.60 cents, a 2.28 cent decline.

Volume was 4,554 lots.

The following deals were reported: 400 bales of cotton from Rasoolabad sold at Rs 5200, 200 bales of cotton from Sahiwal at Rs 5000, 200 bales of cotton from Depal Pur at Rs 5100, 200 bales of cotton from kabirwala at Rs 5200, 400 bales of cotton from Vehari at Rs 5350, 200 bales of cotton from Bahawal Pur at Rs 5450, 200 bales of cotton from Karor Pacca at Rs 5500, 200 bales of cotton from Arif Wala at Rs 5500, 400 bales of cotton from Burewala at Rs 5500, 200 bales of cotton from Kotla Mossa at Rs 5500, 400 bales of cotton from Chani Goth at Rs 5600, 200 bales of cotton from Dera Ghazi Khan (Credit) at Rs 5800.

Courtesy: Business Recorder

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