KARACHI: Trading resumed on the cotton market on Wednesday on a firm note as stray lots changed hands at the higher rates amid slow trading.Mills ready off-take, however, remained on the lower side because of two official closures on account of Ashura and delivery problems, but dealers expect normal resumption of activity by Thursday.
The said prices seemed to have stabilised above the resistance level of Rs5,000 per maund for the fine type and speculate further increase in the coming weeks.
Naseem Usman, chairman, Karachi Brokers Forum, based his higher future price outlook on latest production figures released by the world's major cotton producers, including China and India.
According to him, both the countries, notably China, have so far harvested, lower crop as compared to their previous production figures and future outlook also did not appear that encouraging.
“Mid-season arrival figures, he claims, always give a fair idea of the total crop and both are terribly deficient, notably China, where the crop is reportedly being replaced by some other crop, notably wheat.”
But luckily Pakistan is expected to be on the threshold of harvesting a good crop despite crop losses owing to rains and floods in the lower Sindh.
Some of the leading spinners also hold the same view and hoped if all goes well with the crop in the coming weeks, prices may remain stable limiting imports.
Official spot rates were again held unchanged at the last level of Rs5,300 per maund and stray lots were traded around this level.
Owing to two closures and delivery problems, mill ready off-take was light totaling about 2,000 bales as under: 1,000 bales, upper Sindh at Rs5,100 to 5,200, 400 bales, Garma Raja at 4,900 to 5,000 and 400 bales, each Sadiqabad and Rahimyar Khan at 5,300.