Cotton market: Prices Track Recovery In Global Oil Rates
Prices on the local cotton market tracked the recovery in the world markets, dealers said on Saturday. The official spot rate was unchanged at Rs 5,400, dealers said. In Sindh, prices of seed cotton were at Rs 2000 and Rs 3000 and in the Punjab, rates were at Rs 2300 and Rs 3150, they said. In the ready business, around 5000 bales of cotton changed hands between Rs 5400 and Rs 5750, they said.
According to some brokers most of the leading market players were on the sidelines in the absence of fresh leads. In the meantime, some spinners and mills finalised deals to meet their urgent needs, they added. Some viewers observed that participants were looking relaxed after recovery in the world oil prices.
On Friday, oil prices and world stock markets jumped, providing some relief to bruised investors as frigid weather across the United States and Europe boosted energy demand. Brent crude oil, which tumbled in recent weeks on worries about oversupply, settled 10 percent higher and above $32 a barrel in one of the biggest daily rallies ever. Traders cashing in short positions lifted prices along with the higher short-term demand. Commenting on the prevailing uncertainties on both the economic and political sides, cotton analyst, Naseem Usman said that on the one hand businessmen and traders are fearful, and on the other side, the government is also worried about the slow progress in the economy.
Reuters adds: Cotton futures advanced on Friday, as a 10-percent surge in crude oil prices lifted commodities markets. The March cotton contract on ICE Futures US settled up 0.36 cent, or 0.58 percent, at 62.45 cents per lb. It traded within a range of 62.05 and 62.75 cents a lb. The cash to second-month spread fell 0.02 cent to 0.37 cents per lb.
Total futures market volume fell by 2,236 to 17,637 lots. Data showed total open interest gained 1,617 to 190,474 contracts in the previous session. The following deals finalised: 1000 bales of cotton from Rohri sold at Rs 5400-5500, 400 bales from Yazman Mandi at Rs 5425, 1000 bales from Rahim Yar Khan at Rs 5600 and 2600 bales from Alipur at Rs 5750, they said.
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