Panic selling by ginners may cause sharp decline in the rates as picking operation improved after rains stopped in the cotton belt, both in Sindh and Punjab, dealers said on the cotton market on Thursday. The Karachi Cotton Association (KCA) spot rate was unchanged at Rs 7400, they said.
Prices of seedcotton in Sindh fell by Rs 100 to Rs 2300-2800 and in Punjab were down at Rs 2000-3000, they said. In ready dealings nearly 10,000 bales of cotton changed hands between Rs 7000-7,500, they added. Some experts said that picking operation taking pace as rains stopped in Sindh and Punjab it may end in 24 hours. The ginners are looking in panic as they feel they may not get better rates in the coming days, they said.
Trading activity picked up as a result of panic selling by ginners, they do not want to keep stock for a long time due to quality factor, they said. "We are not definite about the damage extent so it is before time to say any thing about the next direction of market but it looks that prices may come down due to slow demand by mills and spinners following the decline in order by the foreign countries amid recession, some analysts said.
To improve the quality of export products, traders are trying to import better quality of cotton, which also helps them in compensating the local demand, they said. Some of the buyers may opt to wait on the sidelines, because they may like to see the impact first before coming back in, especially for speculators, dealers said. On Wednesday the NY cotton futures ended up for a third straight day, as short covering and merchant buying helped boost values closer to a critical line of technical resistance. With a lack of confidence surrounding macroeconomic prospects, cotton futures have held in a narrow band in recent weeks, unable to garner momentum through either side of a $1.09 to $1.15 range.
The key December cotton contract on ICE Futures US rose 0.66 cent to end at $1.1367 per lb, after moving from $1.1159 to $1.1418. The following deals were reported: 200 bales of cotton from Hala at Rs 7000, 200 bales of cotton from Hyderabad at Rs 7200, 400 bales of cotton from Rohri at Rs 7400, 800 bales of cotton from Saleh Pat at Rs 7400, 400 bales of cotton from Khairpur at Rs 7400, 200 bales of cotton from Mailsi at Rs 7500, 600 bales of cotton from Khanewal at Rs 7400-7500, 200 bales of cotton from Tonsa Sharif at Rs 7400, 200 bales of cotton from Noor Pur at Rs 7400, 400 bales of cotton from Kassowal at Rs 7300, 400 bales of cotton from Rajan Pur at Rs 7250/7300, 400 bales of cotton from Duniapur at Rs 7200/7300, 200 bales of cotton from Faqirwali at Rs 7250, 200 bales of cotton from Kot Radahakishan at Rs 7250, 1000 bales of cotton from Bahawalpur at Rs 7100/7200, 600 bales of cotton from Vehari at Rs 7150/7200, 200 bales of cotton from Tandlian Wali at Rs 7200, 200 bales of cotton from Bahawal Nagar at Rs 7200, 200 bales of cotton from Depal Pur at Rs 7200, 200 bales of cotton from Chichawatni at Rs 7200, 200 bales of cotton from Lodhran at Rs 7200, 200 bales of cotton from Hasil Pur at Rs 7200, 400 bales of cotton from Chistian at Rs 7000/7200, 200 bales of cotton from Daran Wala at Rs 7200, 200 bales of cotton from Haroonabad at Rs 7200 and 200 bales of cotton from Sahiwal at Rs 7200.
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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 14.09.2011
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37.324 Kgs 7,400 130 7,530 7,530 NIL
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Equivalent
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40 Kgs 7,931 130 8,061 8,061 NIL
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