Falling prices attract buyers on the cotton market as phutti arrivals rise

Price declining trend attracted mills and spinners on the cotton market on Tuesday as the ginners indulged in panic selling following the rise in phutti arrivals, dealers said. The Karachi Cotton Association (KCA) official spot rate fall was extended, lowering by Rs 100 more to Rs 6,000, they said.
Prices of seedcotton in Sindh were at Rs 2200-2700 and rates in Punjab were at Rs 2000-2900, they said. In ready dealings over 11,000 bales of cotton changed hands between Rs 5,350-6,300, they said. Market sources said that some improvement was seen in the trade activity as mills and ginners showed interest in fresh buying. On the other hand, the ginners also got panic after reports of the better phutti arrival figures, other experts added that this year cotton production may show betterment in the coming days.
According to a report, the International Cotton Advisory Committee ICAC said that the world cotton output should increase in 2011/12, moderating the previous year's volatile prices, but United States production will miss government estimates. The ICAC secretariat said reports of crop failures in Texas and surveys of crop insurance claims in the United States suggest lower 2011/12 yields than the US Department of Agriculture has projected.
On Monday the NY cotton futures settled easier on investor sales sparked by fears of recession as the market's weak third quarter performance spilled over into the first trading day of the last quarter of 2011, analysts said.
The key December cotton contract on ICE Futures US lost 0.98 cent to end at 99.21 cents per lb, trading from 98.25 cents to $1.0065. The market has been pinned in a rough range from 98 cents to $1.0317 over the past five sessions. Cotton traded on ICE Futures US posted its worst two quarter performance since 2008, Thomson Reuters data showed. Total volume traded Monday hit almost 12,200 lots, little changed from the 30-day norm, preliminary Thomson Reuters data showed.
The following deals were reported: 200 bales of cotton from Tando Adam at Rs 5350, 200 bales of cotton from Hyderabad at Rs 5500, 200 bales of cotton from Hala at Rs 5500, 200 bales of cotton from Kotri at Rs 5800, 200 bales of cotton from Tando M. Khan at Rs 5850, 2000 bales of cotton from Khair Pur at Rs 6100, 2000 bales of cotton from Upper Sindh at Rs 6100, 200 bales of cotton from Jahanian at Rs 5600, 600 bales of cotton from Gajjo Mandi at Rs 5800/6100, 400 bales of cotton from Hasil Pur at Rs 5850/6000, 200 bales of cotton from Qabola at Rs 5900, 200 bales of cotton from Murid Wala at Rs 5900, 400 bales of cotton from Haroonabad at Rs 5900, 600 bales of cotton from Khanewal at Rs 5975/6300, 400 bales of cotton from Mubarak Pur at Rs 6000, 200 bales of cotton from Vehari at Rs 6000, 200 bales of cotton from Multan at Rs 6000, 200 bales of cotton from Layyah at Rs 6000, 200 bales of cotton from Yazman at Rs 6000, 200 bales of cotton from Marott at Rs 6000, 600 bales of cotton from Burewala 6000/6200, 200 bales of cotton from Bahawal Pur at Rs 6100, 400 bales of cotton from Mian Channun at Rs 6100, 200 bales of cotton from Chichawatni at Rs 6200, 200 bales of cotton from Garha Mor at Rs 6250 and 200 bales of cotton from Mianwali at Rs 6300.

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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 03.10.2011

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37.324 Kgs       6,000       130       6,130        6,230              -100

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Equivalent

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40 Kgs           6,430       130       6,560        6,667              -107

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