The Karachi cotton market witnessed a brisk trading activity on back of higher demand amid strong physical prices and stable spot rate, traders at the Karachi Cotton Association (KCA) said Friday.
Majority of the deals matured on sellers’ asking prices while quality lint saw slightly higher prices on paucity of stuff in Punjab and Sindh stations during the trading session, floor brokers said.
A cotton analyst Shakeel Ahmad said, “Mills are purchasing all grades on back of increasing demand of cloth besides thinking of prices to go up further.”
Ahmad said trading at the most of the Sindh and Punjab stations remained range-bound and deals were matured in a range of Rs 6,600 per maund to Rs 7,010 per maund depending on the quality of the stuff.
He said the spinning sector bought lint of all grades and deals also changed hands on ready delivery basis while ginners withholding fine lint demanded slightly higher than prevailing prices during the trading session.
He said prices of cottonseed (phutti) were hovering between Rs 3,400 per maund in Sindh and Rs 3,300 per maund in Punjab.
He said due to higher prices in the international cotton market, the impact on domestic market is obvious and physical prices are still going strong.
Most of the deals in Sindh changed hands around Rs 6,750 per maund to Rs 6,960 per maund while in Punjab business took place at Rs 7,050 per maund, he added.
Widespread floods across the country, caused by torrential rains over the Indus River, have damaged cotton crops in Sindh and Punjab, sparking fears of a shortfall, Ahmad added. According to estimates, the harvest will be around 12 million bales, approximately two million bales short of the target, he maintained.
The private sector commercial exporters brought some of their stocks to capitalise on prices on back of demand by spinning sector.
New York October 2010 future deals are hovering at 96.70 cents per pound while December 2010 at 97.32 cents per pound. Cotlook A Index stood at 103.50 cents per pound.