KARACHI: Frenzied buying pushed cotton prices to a new seasonal high of Rs7,300 per maund and Overall, the undertone was strong and underlying sentiment highly aggressive.
There seemed to be no respite in panic buying from needy spinners, which turned the market highly volatile. With the US dollar gaining strength against Pak rupee, panic buying was witnessed.
Buyers chased quality cotton and there were instances that even second-grade cotton came under strong demand. This indicated that spinners feared paying more for imported cotton due to a steep fall in rupee value against the dollar.
Buyers initially chased limited quantity of quality cotton but soon realised that under the developing scenario lint imports after rupee devaluation will become costlier.
The buyers were also not optimistic about imports of cotton from India since a large-scale pest attack has drastically slashed the crop size.
Above all, cotton brokers said the delay in allowing cotton imports from India has minimised the possibility of getting quality cotton because much of the high grade cotton would had been lifted by end of this month by Indian textile mills or exported.
The surge in cotton prices also had its implication over phutti (seed cotton) as both Sindh and Punjab qualities were quoted in the range of Rs2,800 to Rs3,400 per maund.
It is being estimated that cotton crop size would be around 11.5 million bales but lint quality is a major concern for the textile industry which still needs around 3m bales to meet the shortfall, brokers said.
The KCA spot rates were also revised upwards by Rs100 to Rs6,700 per maund.
The scope of importing cotton from India was also not free of risk after Indian crop suffered severe damage due to a pest attack.
Karachi Cotton Association (KCA) further revised spot rates upwards at Rs6,800 per maund which also stood season’s highest.
Leading cotton markets closed easy, with New York and Chinese cotton markets all around lower. However, Indian cotton was firm.
The following major deals were reported to have materialised on ready counter: 1,400 bales, Daharki, at Rs7,200 to Rs7,250; 600 bales, Ghotki, at Rs7,200 to Rs7,250; 2,000 bales, Saleh Pat, at Rs6,700 to Rs6,800; 2,400 bales, Rohri, at Rs6,700 to Rs6,800; 1,000 bales, Shahdadpur, at Rs6,200; 1,000 bales, Sanghar, at Rs6,100 to Rs6,200; 2,000 bales, Khairpur, at Rs6,650 to Rs6,800; 3,400 bales, Khanpur, at Rs7,200; 600 bales, Dera Ghazi Khan, at Rs7,090; 2,400 bales, Rahimyar Khan, at Rs7,100 to Rs7,200; and 600 bales, Liaquatpur, at Rs7,150.