KARACHI: Cotton prices remained stable on Wednesday for the second consecutive day amid dull trading because of supply disruptions, dealers said.
“Local cotton market will be stable at present, but commodity rates will surge soon after Eid holidays because demand will rise as mill-owners in Punjab have not been receiving cotton bales due to transportation problems,” said a Karachi-based cotton trader Shakeel Ahmad.
Local as well as international cotton prices rose by a significant 41 percent and 31 percent year-on-year respectively in FY10, said Ayub Ansari, a senior analyst at Invest & Finance Securities. Rupee depreciated by an average of 7 percent against the dollar in FY10 which further added to margin expansion. This was also the main factor driving margins in FY09, where the rupee depreciated by a massive 26 percent year-on-year against the dollar.
However, spot rates of the Karachi Cotton Association for average quality lint remained firm at Rs6,400 per maund and Rs6,859 per 40kg. Seedcotton (Phutti) held steady at Rs3,000 and Rs3,100 per 40kg in Sindh and Punjab respectively.
Market turnover stood at 6,700 bales of raw cotton (of 170kg each), including 1,500 bales from Burewala, 400 bales each from Khanewal and Sultanabad, 200 bales each from Arifwala, Mongi Bangla, Gojra, Jhang, Vehari, Sahiwal, Samandari, Pir Mahal and 600 bales in mill-to-mill deals varying between Rs6,325 and Rs6,500 a maund; and 600 bales each from Tando Adam and Hyderabad, 400 bales from Shahdadpur, 200 bales each from Mirpurkhas, Sanghar and Shahpur Chakar ranging Rs6,400 and Rs6,450 per maund.
In the international market, US cotton gained as cotton futures for October and December recovered 0.37 and 1.73 cents to 91.32 and 91.18 cents per pound respectively.