Further increase was seen in the official spot rate on the cotton market on Saturday in process of subdued business, brokers said. The Karachi Cotton Association (KCA) spot rate was given a fresh rise of Rs 100 to Rs 9200, they said. Seed cotton prices in Sindh and Punjab were unmoved at Rs 3,900-4,400, they said. Prices fluctuated slightly as only 1200 bales of cotton changed hand between Rs 9200-9500, they said.
Commenting on the slight dealings, Naseem Usman said that wait-and-see prevailed on the market amid long holidays in the domestic and international markets. He said that the cotton traders and businessmen were hoping for positive developments in the coming days after the clearance of Indian strategy regarding exports of more cotton.
Other brokers attributed the lean business to the ginners' attitude because they were not showing any flexibility in the price line due to short crop. On the other hand the mills were not ready to make any deal above their psychological levels and expecting for decline in the prevailing rates, they added.
On Friday the US cotton futures settled an historic year 91.50 percent higher, with 1.38 percent rise contributing to their overall advance, as strong demand from top consumer China and investment funds nearly doubled prices.
The key March cotton contract on ICE Futures US added 1.97 cents to close at $1.4481 per lb, and set a higher range that ran from $1.4353 to $1.4684 a lb. Volume, however, was exceptionally light at 5,421 lots. The cotton market came in as the second best performing commodity in the Reuters-Jefferies commodity index, up over 80 percent in 2010 and just a shade behind silver. While cotton was off its peak of close to $1.60 a lb set on December 21, the outlook for 2011 remained bullish. Inventories were tight, China's consumption remains hot, and investment buyers viewed the fiber futures as undervalued.
The following deals were reported: 400 bales of cotton from Bahawal Nagar sold at Rs 9200, same figure from Sadiqabad at Rs 9500 and same number from Rahim Yar Khan at the same rate, they said.
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The KCA Official Spot Rate for Local Dealings in Pak Rupees
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FOR BASE GRADE 3 STAPLE LENGTH 1-1/32"
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MICRONAIRE VALUE BETWEEN 3.8 TO 4.9 NCL
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Rate Ex-Gin Upcountry Spot Rate Spot Rate Difference
For Price Ex-Karachi Ex. KHI. As Ex-Karachi
on 31.12.2010
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37.324 Kgs 9,200 120 9,320 9,220 +100
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Equivalent
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40 Kgs 9,860 120 9,980 9,872 +108
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