Downward trend seen on cotton market on good production, fall in global demand

Rise in phutti arrivals and fall in global demand pushed rates downwards in the domestic market on Wednesday, dealers said. The Karachi Cotton Association (KCA) official spot rate was reduced for the third day in a row, down by Rs 100 to Rs 5,500, they said.
Prices of seed-cotton were unchanged in Sindh at Rs 2000-2550 and in Punjab rates were down by Rs 100 to Rs 2200-2600, they said. In ready dealings, above 20,000 bales of cotton changed hands at Rs 3,500-5625, they added. Market sources said that prices tended lower on slow demand by the foreign buyers and it looks that the prices may fluctuate slightly in the coming days.
On the other hand, the ginners and growers were trying to sell unsold stock on expectations of better production, they added. On Tuesday the NY cotton futures finished mixed in spread trade, with the weak macroeconomic outlook seen keeping fiber contracts on the defensive, analysts said.
Global stocks fell on Tuesday after data showed the US economy grew more slowly than expected in the third quarter of 2011, while euro slipped versus dollar as investors shunned risk. The spot December cotton contract on ICE Futures US fell 0.86 cent to finish at 89.95 cents per lb, dealing from 87.50 to 90.75 cents. The most-active March cotton futures rose 0.71 cent to end at 91.12 cents, moving from 89.33 to 92.10 cents. Total volume traded on Tuesday hit over 22,000 lots, less than three percent below the 30-day norm, preliminary Thomson Reuters data showed.
The following deals were reported: 1000 bales of cotton from Mir Pur Khas soldat Rs 3500/4000, 400 bales of cotton from Tando Adam at Rs 4300, 400 bales of cotton from Sakrand at Rs 4500, 2000 bales of cotton from Khair Pur at Rs 4900/5000, 2000 bales of cotton from Upper Sindh at Rs 5300, 600 bales of cotton from Bahawal Nagar at Rs 5150/5300, 400 bales of cotton from Chistian at Rs 5150, 400 bales of cotton from Hasil Pur at Rs 5200, 200 bales of cotton from Bhwana at Rs 5200, 1000 bales of cotton from Ahmed Pur at Rs 5300, 600 bales of cotton from Vehari at Rs 5300, 1000 bales of cotton from Bahawal Pur at Rs 5300, 1000 bales of cotton from Burewala at Rs 5300/5500, 800 bales of cotton from Fort Abbas at Rs 5300, 1000 bales of cotton from Rahim Yar Khan at Rs 5400/5600, 1200 bales of cotton from Khanewal at Rs 5375/5500, 200 bales of cotton from Shujabad at Rs 5400, 200 bales of cotton from Lodhran at Rs 5400, 200 bales of cotton from Sillanwali at Rs 5400, 1000 bales of cotton from Kabirwala at Rs 5400/5500, 200 bales of cotton from Bakkhar at Rs 5500, 600 bales of cotton from Ghazi Ghat at Rs 5500, 200 bales of cotton from Sadiqabad at Rs 5500, 200 bales of cotton from Qabola at Rs 5500, 200 bales of cotton from Gajjo Mandi at Rs 5500, 400 bales of cotton from Dera Ghazi Khan at Rs 5500, 200 bales of cotton from Multan at Rs 5500, 600 bales of cotton from Garh Maharaja at Rs 5500, 200 bales of cotton from Layyah at Rs 5500, 1200 bales of cotton from Fazil Pur at Rs 5600, 400 bales of cotton from Mianwali at Rs 5600, 400 bales of cotton from Rajan Pur at Rs 5625.

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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 22.11.2011

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37.324 Kgs       5,500       130       5,630        5,730              -100

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Equivalent

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40 Kgs           5,894       130       6,024        6,132              -108

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