Lint prices firm on mills active buying on apprehension of further rate rise

Prices showed firmness on the cotton market on Wednesday as mills continued buying on apprehension of fresh rise in the rates, dealers said. The Karachi Cotton Association (KCA) official spot rate was retained at the overnight level at Rs 8,500, they said.
In Sindh prices of new phutti were quoted at Rs 3550-3600 and old crop phutti rates in Sindh and Punjab were: of low type at Rs 2500 and that of superior type at Rs 3000, they said.
In ready business trading activity was good as nearly 6000 bales of cotton changed hands between Rs 7700-9000, they added.
According to the market sources mills were trying to cover the immediate needs at the present prices to keep away from future losses as a result of increase in the rates.
They also said that the mills were looking interested in purchasing of fine quality of cotton to meet the export commitments and to win the competition in the world market.
Some analysts were of the view that due to appreciation in the value of yuan, China imports came down. According to a report, China's cotton imports in May totalled 145,000 tonnes, down 27 percent from the same period last year, an industry web site said on Tuesday citing customs data.
May's imports represented a 31 percent fall from the 210,453 tonnes imported in April, said www.cottonchina.org, a web site run by Cotlook Ltd, the China Cotton Association and the China National Cotton Exchange.
In the meantime, other reports showed that China aims to be self-reliant on cotton supply while imports of the stuff likely rise to meet textile export demand, said officials attending an industry conference on Wednesday.
The gap between China's cotton output and demand will be a long-term tendency, and the shortage may further expand, said Liu Xiaonan, a deputy chief of the economic and trade department under the National Development and Reform Commission, during a cotton conference held in Dalian.
On Tuesday the US cotton futures settled higher on commercial and investor buying, with spot July boosted by the perception there will be a receiver for the contract when it goes into delivery this month, analysts said.
The key December cotton contract on ICE Futures US rose 0.20 cent to finish at $1.3178 per lb, dealing from $1.2852 to $1.3208.
The spot July contract climbed 4.59 cents or by 3.0 percent to settle at $1.5554 per lb. Total volume traded on Tuesday reached more than 18,300 lots at 3:20 pm EDT (1920 GMT), over 10 percent above the 30-day norm, Thomson Reuters preliminary data showed, they said.
The following deals were reported: 500 bales of cotton from Sinjhoro sold at Rs 7700, 1800 bales of cotton from Rahim Yar Khan at Rs 8800, 600 bales from Kabirwala at Rs 8850, 1600 bales from Ali Pur at Rs 8850, 600 bales from Mubarak Pur at Rs 8800, 100 bales from Burewala at Rs 9000, 316 bales from Haroonabad at Rs 8650, 200 bales from Haroonabad at Rs 8500 and 150 bales from Ahmed Pur at Rs 8550.

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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 14.06.2011

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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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