Rise in New York cotton futures: ginners start raising prices on cotton market

After sharp rise in the NY cotton futures, ginners have started increasing prices on the cotton market, brokers said on Wednesday. The Karachi Cotton Association (KCA) official spot rate was unchanged at Rs 8,500, they said. In Sindh and Punjab phutti price of low type was at Rs 2500 and that of superior type at Rs 3000, they said. In ready business nearly 3,000 bales of cotton changed hands between Rs 7,300-8,500, they added.
It was noted that as a result of increase in the NY cotton market, the ginners are trying to raise prices to earn as they earned some time back, they said. In the meantime, prices showed stable trend and may not fall more as country needs to import cotton to meet the export requirements, they said.
Market sources said that expectations for better cotton production next year brought down prices from 14,000 to 7,300, particularly in the local market. Heap of cotton yarn is also a factor behind the fall in the rates, they said. After gold, in agriculture products, rice and cotton attracted the investors and traders, so cotton producing countries increased output of cotton production. In Pakistan, cotton growers were also hoping for the robust cotton production in the new season, they said.
On Tuesday the US cotton futures settled higher on investor buying as talk there will not be enough cotton to be delivered in the spot month fuelled the contract's surge, analysts said. Benchmark July cotton contract on ICE Futures US increased 3.89 cents to conclude at $1.5504 per lb, dealing from $1.5083 to $1.5786. New-crop December rose 1.10 cents to finish at $1.2113 after moving between $1.17 and $1.222.
Volume stood at around 16,600 lots, a quarter below the 30-day norm, Thomson Reuters preliminary data showed. Traders said top merchant Allenberg was supposed to have decertified the cotton it took delivery on in the May contract, causing certified cotton stocks to fall the past few sessions. The failure of the July contract to race past the topside target of $1.60 could see the market falter.
The following deals were reported: 200 bales of cotton from Sanghar sold at Rs 7,300, 82 bales from Shahdadpur sold at the same rate, 1000 bales from Saleh Pat at Rs 8000, 600 bales from Ghotki at Rs 8100-8500, 282 bales from Sadiqabad at Rs 7800-8000, 148 bales from Haroonabad at Rs 7900 and 200 bales of cotton from Bashawal Pur at Rs 8000, they added.

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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 17.05.2011

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37.324 Kgs        8,500       120        8,620        8,620             NIL

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Equivalent

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40 Kgs            9,109       120        9,229        9,229             NIL

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