Active exporters’ buying keeps prices steady on cotton market

KARACHI (October 08 2010): Exporters’ interest in fresh buying helped prices to retain its obtaining levels on the cotton market on Thursday, dealers said. The Karachi Cotton Association (KCA) official spot rate was lowered by Rs 50 to Rs 7000, they said.In the ready business nearly 20,000 bales of cotton changed hands between Rs 6900-7100, they said. Seed cotton prices in Sindh were unchanged at Rs 3150-3200, in Punjab prices were also stay put at Rs 2900-3100, they added.Some cotton experts said that cotton prices would not come down sharply due to rising trend in the NY cotton futures and possible decline in the domestic production due to floods. So, many players in the market were expecting that mills would continue buying on apprehension of prices flare-up, they said. On Wednesday the NY cotton futures closed firmer on investor buying tied in part to the expectation, a government report on Thursday will show strong US cotton export sales, brokers said.The market is also bracing for Friday’s release of the monthly supply/demand report from the US Agriculture Department, they said. ICE Futures US benchmark December cotton contract rose 1.19 cents to finish at 99.75 cents per lb. The contract traded from 98.10 to $1.0014. It is an inside day since the range is within Tuesday’s 96.90 to $1.004 band.Total volume traded reached 11,478 lots at 2:30 pm EDT (1830 GMT), about a third below the 30-day average at 18,107 lots, preliminary Thomson Reuters’ data showed. According to a report some analysts said on Wednesday that cotton market players will look closely at US exports and changes in the numbers of No 1 consumer China, as well as India and Pakistan when Washington releases a key crop report this week.

The US Agriculture Department (USDA)’s monthly supply/demand report will be issued on Friday, less than two weeks after cotton prices vaulted to a 15-year high on strong demand for the fibre, tight stocks and heavy buying by investment funds. The analysts expect upward revisions in US cotton exports, given strong sales and a reduction in China’s production and ending stocks coupled with any increase in its cotton imports. The trade will digest any change in the USDA estimate of India’s cotton exports and the latest forecast for Pakistan, whose cotton crop has been hit hard by floods.

The following deals were reported: 2600 bales of cotton from Shahdad Pur sold at Rs 7000-7100, 2000 bales from Tando Adam at Rs 7025-7100, 2000 bales from Mir Pur Khas at Rs 7000-7100, 600 bales from Jhole at Rs 7000-7050, 2400 bales from Sanghar at Rs 7000-7050, 1400 bales from Nawabshah at Rs 7000-7050, 2000 bales from Khair Pur at Rs 7100, 1200 bales from Upper Sindh at Rs 7100, 600 bales from Gajjo at Rs 6900, 800 bales from Hasil Pur at Rs 6950, 600 bales from Chichawatni at Rs 7000, 400 bales from Bahawal Nagar at Rs 6900, 400 bales from Bahawal Pur at Rs 7000, 200 bales from Vehari at Rs 7000, 800 bales from Fazil Pur 7000, 200 bales from Mongi Bangla at Rs 7000, 600 bales from Burewala at Rs 7000, 400 bales from Rajan Pur at Rs 7000, 400 bales from Khanewal at Rs 7000 – Brecorder