KARACHI: Forced by rapidly rising cotton prices, buyers on Saturday took a cautious approach which reduced trading activity and stabilised cotton prices which mostly stayed pegged at overnight level.

The recent consistent rising trend in prices first came under check a day earlier and extended to another day which indicated that buyers are in no mood to buy lint pay at a higher price.

During past two weeks, cotton prices had been consistently rising owing to various factors including a steep fall in the rupee value, strong demand for quality cotton from spinners and fear of short crop.

However, as cotton prices have hit the ceiling, the spinners now seem to be worried about their viability and holding back their buying orders at least for some time, brokers said.

Consequently, cotton prices have started to stabilise amid slow trading activity but not before rising up to Rs400 per maund during the current week and up to Rs1,050 in a week earlier and are currently being quoted at a high level of Rs9,100 per maund.

The Karachi Cotton Association (KAC) spot rate committee also revised cotton prices upward during this period by Rs400 to Rs8,900 per maund.

It was interesting to note that ginners generally held back their cotton stocks and growers also reduced the flow of phutti which further pushed the prices during these two weeks.

According Chairman Karachi Cotton Brokers’ Forum Naseem Usman, one of the major factors for this rising trend in cotton prices had been rumours about further fall in the rupee value against dollar in coming days.

The New York Cotton Exchange, after experiencing short-lived recovery owing to fear of damage to standing cotton crop by hurricane once again came under pressure after the US Department of Agriculture reported slower cotton exports. The Chinese and Indian cotton markets closed steady.

The Karachi Cotton Association (KCA) spot rates were firm at overnight level at Rs8,900 per maund.

The following deals were reported to have changed hands on ready counter: 1,000 bales, station Shahdadpur, done at Rs,8400; 2,400 bales, Saleh Pat, at Rs8,800 to Rs8,950; 1,000 bales, Rohri, at Rs8,800 to Rs8,950; 3,000 bales, Khairpur, at Rs8,700 to Rs8,850; 1,000 bales, Sadiqabad, at Rs9,000 to Rs9,100; 1,200 bales, Rahimyar Khan, at Rs8,950 to Rs9,000; 1,000 bales, Noorpur Nooranga, at Rs8,860 to Rs8,950; 1,400 bales, Alipur, at Rs8,875 to Rs8,900; 1,000 bales, Ahmedpur East, at Rs8,850; 2,200 bales, Khanwal, at Rs8,800 and 200 bales from Bahawal Nagar were done at Rs8,600.

Published in Dawn, October 21st , 2018