Tug-of-war like situation prevailed on the cotton market on Wednesday as sellers were not ready to finalise any deal below their psychological level, brokers said. The Karachi Cotton Association (KCA) spot rate was unchanged at Rs 9700, they said. Seed cotton prices in Sindh and Punjab were at Rs 3,900-4,500, they said.
In ready business only, 3000 bales of cotton changed hands between Rs 9800-10,000, they added. Market sources said that the ginners were not prepared to sell cotton below their psychological levels due to short crop. On the other hand the mills were not ready to pay on expectations that prices may come down in the near future.
Besides, China is busy in purchasing cotton despite the higher trend to meet its domestic requirements, they added. But, some analysts said that it looks very difficult under the circumstances as phutti supply has fallen and prices are still on the upward trend in the international market and local market, too,
On Tuesday the US cotton futures settled with healthy gains, reversing small losses in the last minutes of trade, as investors saw an opportunity to buy in a tight market when prices fell briefly before the close. Concerns about global cotton supplies kept prices propped up for most of the session, as some investors focused on flooded cotton crops in Australia and dry conditions in Texas growing regions, among other concerns, brokers said.
Benchmark March cotton contracts on ICE Futures US finished with 1.11 percent gains at $1.4378 per lb, up 1.58 cents. The contract advanced to a high at $1.45 shortly before the close, up from the day's low at $1.3980, last seen on December 30. Volume firmed to 8,818 for the March contract, greater than the 6,823 contracts traded on Monday. Monday's total tally came to 11,541 lots, according to ICE data.
The following deals were reported: 800 bales of cotton from Upper Sindh sold at Rs 9800-10000, 1200 bales from Rahim Yar Khan at Rs 9800, 400 bales of cotton from Sadiqabad at Rs 9800 and 600 bales of coton from Mian Wali at Rs 9900-10,000, 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 04.01.2011
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37.324 Kgs 9,700 120 9,820 9,820 NIL
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Equivalent
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40 Kgs 10,395 120 10,515 10,515 NIL
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