KARACHI: Trading activity gained momentum on Monday as flow of phutti (seed cotton) from cotton fields into ginneries started to improve. Though the volume still remained below average – a normal occurrence at time of the season – trading was highlighted by a steep rise in cotton prices which touched a seasonal high level at Rs9,000 per maund.

After waiting for a long period of time, many spinners managed to get hold of quality cotton to meet their immediate needs.

Meanwhile, brokers said that further devaluation of the rupee will result in new wave of inflation. The resultant cost push inflation is very alarming for the industry which largely depends on imported raw materials, they added.

Polyester staple fiber prices increased by Rs6 to Rs180 per kg which is a strong indicator that imported raw materials will rise after the rupee devaluation.

Phutti prices also moved higher at Rs4,000 to Rs4,200 for Sindh variety and Rs3,800 to Rs4,000 for Punjab quality. Much of the trading materialised in Sindh cotton but some deals were also finalised from Punjab variety, brokers said.

According to market sources, late in the evening a deal of 900 bales from Burewala and another deal of 200 bales from Tando Adam were both done at Rs9,000 per maund.

The Karachi Cotton Association (KCA) spot rates were firm at week end level at Rs8,600 per maund.

The following deals were reported to have changed hands on ready counter: 3,000 bales, station Tando Adam, at Rs8,700 to Rs8,800; 1,800 bales, Shah­dadpur, at Rs8,700 to Rs8,800; 1,200 bales, Sanghar, at Rs8,750 to Rs8,800; 200 bales, Naua­bad, at Rs8,800; 200 bales, Burewala, at Rs8,800, 400 bales, Vehari, at Rs8,700 to Rs8,800, and 200 bales, Chichawatni, at Rs8,700.

Published in Dawn, July 17th , 2018