High Quality Cotton Lint: Prices Sharply Up On Panic Buying

High Quality Cotton Lint: Prices Sharply Up On Panic Buying
Surging demand for quality lint, pushed the rates sharply higher on the cotton market on Saturday, dealers said. The official spot rate was higher by Rs 100 to Rs 5,350 dealers said. In the Punjab prices of seed cotton were at Rs 2400 and Rs 3100, they said. In the ready business, nearly 10,000 bales of cotton changed hands between Rs 5310 and Rs 5650, they said.
According to the market sources said that nothing was new except, spinners rushed for lint cotton as diminishing stock propelled them to make deals in a big way. Cotton analyst, Naseem Usman said that short supply of the fine type and report of fall in Indian cotton production caused uncertainty among buyers. Prices of cotton are picking up in the international markets except China, where rates not improving mainly because of decline in local demand. Under the situation, it appears that prices may rise in the near future, other brokers said. They said that county has to import more cotton to keep a balance between demand and supply.
Reuters adds: Cotton futures rose on Friday to the highest in over six weeks, breaking through the key psychological level of 60.40 cents per pound on short covering, amid an outlook for tight supplies and an up tick in overall commodities. “Fundamentals are bullish there is a lack of tangible, high grade current crop, not just in the United States, but worldwide,” said Peter Egli, director of risk management at British merchant Plexus Cotton.
The front month May contract on ICE Futures US has been trading higher than the July and December contracts for well over a month. A backwardation, with nearby prices at a premium to those further out, is often seen as a sign of tight nearby supplies. The front-month May contract on ICE Futures US settled up 1.04 cent, or 1.76 percent, at 60.07 cents per lb, after hitting 60.58 cents a lb, the highest level since February 22. It ended the week up about 1.47 percent.
Total futures market volume rose by 14,878 to 59,474 lots. Data showed total open interest fell 331 to 222,917 contracts in the previous session. The following deals finalised: 2400 bales of cotton from Rohri at Rs 5310, 2000 bales from Ghotki at Rs 5650, 1405 bales from Hasilpur at Rs 5450-4600, 2700 bales from Sadiqabad at Rs 5500, 400 bales from Rahim Yar Khan at Rs 5500, 200 bales from Mianchanu at Rs 4850 and 500 bales from Dunyapur at Rs 4700, they said.