Lacklustre conditions prevailed on the cotton market on Thursday as leading participants were conspicuous by their absence due to lack of motivating factor, dealers said. Karachi Cotton Association (KCA) official spot rate was steady at Rs 12,500, they said.
In Sindh and Punjab phutti price of low type was at Rs 4000 and superior type also unchanged at Rs 5000, they said. In ready business, not a single deal finalised as ginners were not ready to lower the asking prices, they added. According to the market sources, the mills still need nearly one million bales of cotton to meet the export commitments.
In the meantime, after continued fall in the NY cotton future, mills did not take interest in the fresh buying in anticipation of decline in the local prices, they said. According to the news, a top economic planning body said that China's government will begin a cotton purchase and reserve policy this year, its first such mechanism aimed at stabilising production.
The policy was launched just as Chinese cotton farmers start planting the crop, and may "attract those farmers who are still hesitating on their planting decisions to grow," said Dong Shuangwei, an analyst at Capital Futures. On Wednesday the US cotton futures ended slightly higher on investor buying as players braced for tomorrow's release of a keenly awaited government plantings report, analysts said.
The US Agriculture Department will release its annual potential plantings data on Thursday at 8:30 am EDT (1230 GMT). The USDA report is the first government survey of likely plantings for major row crops in 2011. The key May cotton contract on ICE Futures US fell 1.21 cents to conclude at $1.9367 per lb, dealing from $1.9223 to $1.9993. Total volume traded in the cotton market was around 24,600 lots, about five percent below the 30-day norm, Thomson Reuters preliminary data showed.
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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 30.03.2011
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37.324 Kgs 12,500 120 12,620 12,620 NIL
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Equivalent
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40 Kgs 13,396 120 13,516 13,516 NIL
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