Prices eased on Thursday as mills and spinners remained sidelined as prices are not matching with their psychological levels, dealers said on the cotton market. Karachi Cotton Association (KCA) official spot rate was unchanged at Rs 13000, they said.
In Sindh and Punjab phutti prices of low type were inert at Rs 4500 and superior variety came down sharply by Rs 400 to Rs 6000, they said. In ready business prices fell as above 3000 bales of cotton changed hands at Rs 12700-13500, they added.
The mills and spinners were not very active as they are tired of chasing the new rise in the rates, they said. In the short run, it appears that the prices may continue the downward trend due to decreased buying interest by the mills, Naseem Usman said.
Commenting on the recent rise in the prices of cotton locally and internationally, some experts said that in the seminars exporters are emphasising the introduction of new cotton variety to ease pressure over the supply and prices, so it is expected that cotton production may show some improvement in the coming days.
One factor also came up after the soaring prices of cotton and that is growers' attitude, because they are trying to be the main player in the new cotton season, may adopt the role of price trend setter, after moving the middlemen, they said. Short crop domestically and globally, higher cost of inputs and higher prices all have joined hands to create problems for the cotton traders, including textile industry, they said.
On Wednesday the US cotton futures closed lower on investor sales as most players finished adjusting positions before release of Thursday's government crop report, analysts said. The key May cotton contract on ICE Futures US fell 2.73 cents to finish at $2.0441 per lb, trading from $2.0248 to $2.134. Open interest in cotton, an indicator of investment exposure in cotton, fell to near a 7-1/2 month low at 173,688 lots as of March 8, data from ICE Futures US showed.
The following deals were reported: some 400 bales of cotton from Alipur sold at Rs 13500, same figure from Rahim Yar Khan at the same rate, same figure from Hasilpur at Rs 13200, 1300 bales from Faqirwali at the same rate, 400 bales from Shujabad at Rs 12750 and 400 bales of cotton from Karoor Pakka at Rs 12700.
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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 08.03.2011
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37.324 Kgs 13,000 120 13,120 13,120 NIL
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Equivalent
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40 Kgs 13,932 120 14,052 14,052 NIL
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