Cotton supply may ease as India lifts ban on export.

Karachi—Cotton supply position may improve in the coming days as India has lifted the ban on export of raw cotton, dealers on the cotton market said. The Karachi Cotton Association (KCA) official spot rate dropped by Rs 50 Rs 6400, they said. In ready business, after a gap of about one week, some deals were finalised.

A deal of 200 bales of new crop from Haroonabad was done at Rs 5500 for delivery in 10-15 July 2010. Another business was finalised for 400 bales from Ghotki at Rs 6400. It is expected that trading activity may improve in the coming days, dealers said.

They said that cotton supply may improve in the near future as India has removed ban on export of raw cotton. Now the Indian exporters are bound to get licence from the commerce ministry. According to market sources, traders may come back next week on routine business as the government has rejected the mills’ demand to remove RD on exports of cotton yarn.

Naseem Usman, chairman of Karachi Cotton Brokers Association (KCBA), after a short survey of the cotton growing areas of the Punjab, said that production and quality would show significant progress. Favourable weather condition and required supply of irrigation water, in fact, helped the cotton production to grow progressively, other experts said.

They said that growers are quite happy after sowing of cotton but present uncertainties over the exports of cotton yarn made all cotton circles uneasy. On Friday, the US cotton futures rose about 1 percent after a weaker dollar and rise in share prices on Wall Street spurred investors to bid the industrial commodity higher. The key July cotton contract on ICE Futures rose by 0.88 cent to 82.97 cents per lb, trading from 81.54 to 83.21 cents.The volume traded in the July contract stood at 7,599 lots.

Source : pakobserver.net