Higher prices depress cotton demand

KARACHI: Rising prices depressed demand for the raw cotton in the local market on Monday, while curbing entire chain of the commodity business, dealers said.
“Soaring commodity prices dented the demand as good quality produce is selling at Rs12,500 per maund,” said Shakeel Ahmed, a cotton analyst.
“Trading at the Karachi Cotton Exchange (KCE) remained dull amid higher prices and tight supply.
Ginners are not willing to sell cotton on loans, while mill-owners want to lift the commodity on credit due to financial problems, as they are not able to complete their export orders because of prolonged power and gas outages in the country.”
He said the rising trend would persist for the next upcoming months until the new crop’s arrival in the market.
Spot rates of the Karachi Cotton Association (KCA) remained steady at Rs11,800 per maund and Rs12,646 per 40kg for average-quality lint.
Punjab growers sold seedcotton (Phutti) in the range of Rs4,000 and Rs5,200 per 40kg.
Only two small deals were reported at Rs12,500 per maund in Punjab and Sindh, respectively.
Moreover, commodity experts said supply for ginned cotton remained tight in the main commodity markets, including the United States and China.
China’s National Bureau of Statistics reported that the country’s cotton output fell by 6.3 percent in 2010 to 5.97 million tons, while whetting appetite for the commodity.

(Source: http://www.thenews.com.pk/TodaysPrintDetail.aspx?ID=33628&Cat=3&dt=3/1/2011)