KARACHI: Cotton prices rallied on Friday amid tight phutti (seed cotton) supply and strong demand for cotton from the spinning industry. The undertone remained firm and outlook for the near future bright.

Floor brokers said report of short cotton crop induced growers to hold back their phutti which pushed prices higher on strong demand from ginners. Spinners also rushed to replenish their stocks fearing surge in lint prices due to shortage.

According to market sources, phutti prices rose by Rs50 per 40kg as growers started to hold back their crop in order to get higher price due to short crop. Besides spinners, there was also strong demand from exporters, brokers said.

The Karachi Cotton Association (KCA) also revised spot rates upward by Rs50 to Rs4,550 per maund.

The following major deals were reported to have changed hands on ready counter: 1600 bales from Shahdadpur done at Rs4600 to Rs 4625, 1000 bales Tando Adam at Rs4600, to Rs4650, 1400 bales Sanghar at Rs4600 to Rs4625, 1000 bales Mirpurkhas at Rs4625 to Rs4650, 1000 bales Burewala at Rs4600 to Rs4650, 1200 bales Khanewal at Rs4600 to Rs4700, 600 bales Chichawatni at Rs4625 to Rs4650, 400 bales Bahawalpur at Rs4700.

Moreover, the upward trend and recovery on world cotton markets also influenced the proceedings where New York cotton gained for all the future contracts except maturing October 2015 contract which recorded modest decline.

Published in Dawn, September 5th, 2015

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