New York's Cotton Futures remained at a high yesterday although many traders kept to the sidelines and preferred waiting for a rise in demand from China due shortly. There were signs of panic buying in Pakistan with ginners increasing prices. The current high trend in China came to halt with Future contracts crashing down.
New York
It was business as usual in New York yesterday following Monday's closure in observance of Martin Luther King day.
Futures closed a fraction higher from Friday with the key March contract up 0.06 to 55.99 cents per pound and May up 0.08 to 57.15.
Trading opened on a similar level to Friday's high close and encouraged by speculative buying.
Investment funds possessing large cash pools have been propping up prices but selling prevented March from inching past 56 cents.
Cotton prices have been riding high but certain analysts have warned these could fall should fund interest in the US ease up.
Overall, there was little to stimulate trade activity and many key players preferred to remain on the sidelines waiting for the next development to prompt activity.
Analysts say they are also keeping an eye on the expected increase of demand from China which may occur before the Chinese New Year at the end of January.
Physical prices again remain unchanged today (CIF/CFN China) and Cotlook's A index was also a non-mover yesterday at 58.45 cents per pound.
Indian exports lower
Prices on the East India Cotton Exchange were again steady on moderate demand.
Cotton exports have commenced to slow down in response to rising domestic prices resulting in lower gains for exporters.
Most of the demand from abroad has been for the medium staple Shankar 6-A variety which closed yesterday unchanged at 18,600 rupees per candy.
Cotton shipments head mainly to China where its intake has increased 35 per cent in 2005.
China Futures crash
China's domestic market prices have today fallen for ZCE's March contract and CNCE's January contract.
March was down 135 yuan to 15,075 yuan per ton and January 42 yuan lower at 14,755.
China Cotton Association's 328 Grade remained unchanged at 14,316 yuan per ton indicating weakening interest from spinners.
Panic buying in Pakistan
Trading finally started to heat up in Pakistan following the return from Eid celebrations with the Karachi Cotton Association's Spot Price increasing 25 rupees to close at 2,400 rupees per maund.
This has ended a long run of flat trading with ginners confidently demanding higher prices.
The market expects the latest fortnightly PCGA report to appear before 20 January and could lead to panic buying from mills.
