Prices fall modestly in thin trade

After maintaining a stable trend for a long time, cotton prices fell modestly on Thursday in the process of thin trading activity, dealers said. The official spot rate was down by Rs 50 to Rs 6750, they said. In Punjab prices of seed cotton were unchanged at Rs 3750-3800, as per 40 kg, they said.

In ready session, nearly 1400 bales of cotton sold at Rs 6850-7000, they said.

Market sources said that both buyers and sellers adopted cautious attitude towards new deals after the Fed decision.

The US Federal Reserve raised interest rates for the second time in three months, a move spurred by steady economic growth, strong job gains and confidence that inflation is rising to the central bank's target.

The decision to lift the target overnight interest rate by 25 basis points to a range of 0.75 percent to 1.00 percent marked a convincing step in the Fed's effort to return monetary policy to a more normal footing.

The limited stock with ginners and shortage of quality cotton forced the mills and ginners to refrain from new deals, they said.

Cotton analyst, Naseem Usman said that few deals were finalised on prices, which were matching with the ginners' psychological levels.

In the meantime, he said that it was positive development that business of cotton-yarn in the local market is improving.

Furthermore, sowing for the new season has started in the lower Sindh and in Punjab, it will begin after some weeks, other experts said.

Reuters adds: The New York cotton futures were higher on Wednesday on falling demand.

The following deals reported: 600 bales from Lodhran at Rs 6850, 400 bales from Haroonabad at Rs 6900 and same figure from Liaquatpur at Rs 7000, they said.