Runaway cotton prices curb domestic trading

KARACHI: Runaway cotton prices curbed domestic trading on Friday, however, International Commodity Exchange (ICE) hits a record high amid healthy demand for cotton, dealers said.
“The recent surge in raw cotton has taken it to an all-time high of Rs14,000 per maund on credit in the local market, depressing cotton trading volume. Big factory owners are buying cotton at Rs13,500 per maund in cash because of tight supply, while small factories are being forced to shut their operations by higher prices,” said Shakeel Ahmed, a cotton analyst.
“Sixty-seven out of 1,212 ginning factories are busy in processing seedcotton and around 40,000 bales of raw cotton have arrived in the local market.”
Criticising the Pakistan Cotton Ginners’ Association (PCGA) report issued on Thursday, Ahmed said that the figures of seedcotton arrival was correct, but the unsold stocks seemed to be incorrect as the report quoted around 0.4 million bales.
“This is only a ginners association, if they show a fall or rise in the total output of seedcotton, they will cash in on the situation in both the cases. It would be better, if they include the KCA members, growers, traders and brokers for collecting data, as it would help estimate the country’s crop output correctly.”
At the International Commodity Exchange (ICE), raw cotton for March and May contracts surged by 3.75 cents and 5.10 cents to hit an all-time high of $2.08 and $2.05 per pound, amid robust demand for cotton across the world.
Spot rates of the Karachi Cotton Association (KCA) remained steady at Rs12,000 per maund and Rs12,860 per 40kg for average-quality lint.

(Source: http://www.thenews.com.pk/TodaysPrintDetail.aspx?ID=34340&Cat=3&dt=3/5/2011)