KARACHI: Cotton prices rose on Thursday as buyers rushed to book big lot deals to replenish their stocks amid short supply.
The revival of activity in cotton yarn and fabrics was another factor which induced sentiment, brokers said. Leading world cotton markets also moved higher, thereby triggering brisk buying activity from spinners. Reports suggesting short cotton crop in India also created panic buying as spinners are no more able to import cotton from the neighbouring country.
Indian, Chinese and US cotton markets surged higher on encouraging activity in cotton yarn and fabrics the world over. China was going to start selling its cotton stocks in the world market from May 3. However, analysts believe it would have little impact on prices.
Cotton analyst Naseem Usman said that current rising trend in cotton prices in the domestic market was encouraging as it would induce growers to grow more cotton for which sowing has just started.
As per private estimates, the next crop (2016-17) size would be over 13 million bales, whereas the government has placed it at 15 million bales. However, all would depend on climate conditions and profit margin to growers, he added.
The KCA raised its spot rates by Rs50 to Rs5,500.
Major deals on ready counter were: 764 bales from Layyah (Rs5000 to Rs5100 per maund), 1716 bales Mianwali (Rs5200 to Rs5800), 500 bales Tonsa Sharif (Rs5300), 600 bales Rajanpur (Rs5400), 800 bales Yazman Mandi (Rs5500), 2000 bales Khanpur (Rs5600), 1000 bales Sadiqabad (Rs5800) and 200 bales Dera Ghazi Khan (Rs5850).
The New York cotton market finished higher as prices crossed 64 US cents mark.