2011-04-30

Cotton market resists fresh fall in prices

KARACHI, April 30: The cotton market on Saturday resisted fresh fall after having tumbled by over Rs1,000 per maund over the last couple of sessions but in physical trading most of the deals were finalised below the official spot rates, floor brokers said.

They said smart recovery staged by the New York cotton futures on the revival of speculative support at the lower levels may be one of the major resistance factors behind the status quo.

The New York cotton futures, which had fallen during the last couple of weeks from the all-time peak level of 214 and 210 cents per lb to 172.82 and 152.02 cents per lb for both the ruling May and forward July contracts recovered by 5.96 and 6 cents at 178.78 and 158.02 cents, respectively, they said.

They, however, ruled out the possibility of any sympathetic rise in local prices as the unsold stock of lint with ginners is mostly of inferior type and may not find willing buyers at the higher pri ces.

But if the current rebound in global prices is sustained in the coming weeks, it would certainly have a bullish impact on new crop rates, market sources said.

The other factor, which is expected to determine new crop prices in late August or early September, will be the size of the crop in the major growing areas including India, the US and Pakistan, they said.

Meanwhile, ginners remained busy in clearing backlog of stray lots as some of the low-mix lots were traded as low as Rs7,500 per maund. An exporter also sold 800 bales at Rs9,000 owing to falling foreign demand and lower prices.

According to reports reaching here from the interior, the harvesting of the wheat crop in the major growing areas is in the final stages as growers are trying to be well in time for the sowing of new cotton crop in the wheat-harvested fields.

Official spot rates resisted fresh fall and were quoted unchanged at Rs9,500 per maund for an average quality lint.

The following are details of some of the deals, which had gone through on Saturday evening: 100 bales, Sultanabad at Rs7,500, 400 bales, Tonsa Sharif at Rs7,850, 400 bales, Garma Raja at Rs8,000, 200 bales, Qaboola on credit at Rs8,800 and 800 bales, sold by an exporter at Rs9,000.

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