KARACHI: Frenzied buying was witnessed on the cotton market on Wednesday following reports that the New York cotton market scrambled to a new seasonal high in the aftermath of Hurricane Harvey.

The forecast of another hurricane, Irma, hitting the state of Florida has further caused panic, pushing up New York cotton market above US75 cents per lb. The current season started at US67 cents per lb.

At the outset, there was panic buying from spinners who rushed to cover up their positions in order to meet near future demands. Many spinners had deferred their buying list after Eidul Azha in anticipation that prices would come down.

Developments on the global front also included a strong appetite shown by China for cotton and cotton yarn which influenced sentiment.

According to market reports, China had recently sold huge stocks of cotton from its previous inventory but is now keen to import cotton from Pakistan. Traditionally it has never purchased cotton from Pakistan. Demand for cotton yarn from China is also expected to increase manifold, sources said.

Phutti (seed-cotton) arrivals in Punjab has yet to gain momentum. Many ginning mills in the province are lifting phutti from Sindh in order to keep their units running. The low price of phutti in Sindh was another factor which attracted buying from Punjab ginning units.

It is being estimated that once phutti arrival jumps up in Punjab, cotton prices may come under pressure, provided international factors also normalise and prices stabilise.

Due to sudden rise in cotton prices in ready deals, the Karachi Cotton Association (KCA) also revised upwards it spot rates by Rs150 to Rs6,050 per maund.

The following major deals were reported on Wednes­day: 1,600 bales, Kotri, at Rs5,950 to Rs6,100; 1,400 bales, Mirpurkhas, at Rs5,950 to Rs6,100; 1,400 bales, Sanghar, at Rs6,000 to Rs6,100; 1,600 bales, Shahdadpur, at Rs6,000 to Rs6,100; 2,000 bales, Tando Adam, at Rs6,025 to Rs6,100; 1,800 bales, Kabir­wala, at Rs6,300; 2,000 bales, Khane­wal, at Rs6,300; 1,800 bales, Vehari, at Rs6,200 to Rs6,300; 800 bales, Baha­wal­pur, at Rs6,200 to Rs6,300; and 600 bales, Haroonabad, at Rs6,200 to Rs6,300.

Published in Dawn, September 7th, 2017