Mills, cotton exporters adopt wait-and-see mood resulting in lacklustre trading

Lacklustre business activity was seen on the cotton market on Monday as mills and exporters adopted wait-and-see attitudes to observe the latest development, dealers said. The Karachi Cotton Association (KCA) official spot rate was unmoved at Rs 8,600, they said. In
Sindh price of new phutti were higher at Rs 3700 and in Punjab seed cotton rates was at Rs 3900 and old crop phutti in Sindh and Punjab, the rates were of low type at Rs 2500 and that of superior type at Rs 3000, they said. In ready business, approximately 300 bales of cotton from Haroonabad (new crop 2011-12) sold at Rs 8700, they said.
Some analysts said that the cotton market has witnessed lean business but prices are stable as arrival of phutti began at few ginning factories in Haroonabad in Punjab and in Sindh. Commenting on the slow business, Naseem Usman said that after making good business during the last several sessions, the spinners and exporters are cautious, waiting for new development as experts were hoping for better cotton production in the coming days.
He said that mills and spinners were now in a wait-and-see position as ginners were not taking interest in cutting down prices though they have still around 45,000 bales of cotton but trying to sell them at their psychological level. According to a report 90 percent cotton sowing has been achieved in the country for the next season and the crop situation is satisfactory so far. The country is expected to have 15 million bales of cotton. It is likely that the USA and China may have lower cotton production due to drought in some cotton growing areas, in the meantime, Pakistan, India and Brazil are likely to have good crops because of favourable weather.

===========================================================================

The KCA Official Spot Rate for Local Dealings in Pak Rupees

---------------------------------------------------------------------------

FOR BASE GRADE 3 STAPLE LENGTH 1-1/32"

---------------------------------------------------------------------------

                                    MICRONAIRE VALUE BETWEEN 3.8 TO 4.9 NCL

===========================================================================

Rate              Ex-Gin   Upcountry   Spot Rate    Spot Rate    Difference

                    For      Price     Ex-Karachi  Ex. KHI. As   Ex-Karachi

                                                  on 18.06.2011

===========================================================================

37.324 Kgs       8,600       120       8,720        8,720               NIL

---------------------------------------------------------------------------

Equivalent

---------------------------------------------------------------------------

40 Kgs           9,217       120       9,337        9,337               NIL

===========================================================================