KARACHI: Sustained buying from textile industry pushed cotton prices higher on Friday. However, much of the activity remained around quality cotton which is running in short supply.
Though higher arrival of phutti (seed cotton) should have pushed down cotton prices, quality constraints kept spinners engaged in a buying spree for the second consecutive day despite price increase.
According to market sources, phutti arrival have touched record level at 125,000 bales per day and almost all the ginning factories in Punjab are currently functioning at high scale.
Currently its peak cotton season, with phutti arrival at its highest, and spinners normally stay active in building up inventories for future needs.
However, brokers said that in coming days prices will come under pressure as phutti arrival gains further momentum. However, fear of quality was keeping spinners somewhat nervous because no official version has been issued which quantifies the exact damage to cotton crop. The recent monsoon rains adversely impacted the standing cotton crop in lower Sindh while the ongoing heat wave is feared to damage cotton crop in Punjab and Sindh.
Earlier, on Thursday, New York and Chinese cotton markets closed easy but Indian cotton remained steady on reports of incentives being offered by the state government of Gujarat to value-added sector.
According to reports the state has established Gujarat Industrial Development Corporation for giving incentives to textile value-added industry in the shape of lower power tariffs and also increased wages for textile industry workers. The state of Gujarat is expected to harvest bumper cotton crop this year.
The Karachi Cotton Association (KCA) spot rates were revised upward by Rs50 to Rs6,150 per maund.
The following major deals were reported to have changed hands on ready counter: 2,000 bales, Rohri, at Rs6,200 to Rs6,250; 1,600 bales, Saleh Pat, at Rs6,250 to Rs6,300; 5,000 bales, Khairpur, at Rs6,200 to Rs6,250; 1,000 bales, Nawabshah, at Rs6,100 to Rs6,125; 2,000 bales, Sakrand, at Rs6,100; 3,400 bales, Fazalpur, at Rs6,250 to Rs6,300; 1,000 bales, Rajanpur, at Rs6,250 to Rs6,300; 3,000 bales, Vehari, at Rs6,250 to Rs6,275; 4,400 bales, Mianwali, at Rs6,200 to Rs6,250; 2,000 bales, Burewala, at Rs6,200 to Rs6,250; 1,600 bales, Shaujabad, at Rs6,225; 1,000 bales, Khanewal, at Rs6,225; 4,600 bales, Layyah, at Rs6,200 to Rs6,225; 2,200 bales, Bahawalpur, at Rs6,200 to Rs6,225; 1,000 bales, Fort Abbas, at Rs6,200; and 2,000 bales, Chichawatni, at Rs6,200.