Cotton prices tended higher on the local market on Wednesday following the sharp rise in the NY cotton futures, dealers said. The official spot rate' overnight loss, was reversed, raised by Rs 50 to Rs 5,400, they said. Prices of seedcotton in Sindh were at Rs 1800-2300 and in the Punjab at Rs 2000-2750, they said.
In ready dealings about 20,000 bales of cotton changed hands at Rs 3,600-5,550, they added. Some experts said that sharp rise in the NY cotton market helped the prices to go up in the local market and partly because of anticipations of the Trading Corporation of Pakistan (TCP) intervention in the near future.
According to the market sources, the TCP will start cotton buying from the market, when the Economic Coordination Committee (ECC) asks to intervene in the market. As usual, the ECC meeting held on Tuesday but hopes of fixation of prices faded as the committee again postponed the issue. The ginners may face some problem, if the ECC does not take any decision regarding support price. Because they have huge stock of unsold cotton in expectations of rise in the rates, they added.
The decision by the TCP to purchase cotton and fix the support price at Rs 6000 may bring stability in the prices in the coming days, they said. In the meantime, it is most likely that the growers may not be benefit from any fresh rise after couple of sessions. Because by that time, a large number of small growers may have sold their unsold stocks at the lower rates, they said.
Until, now it appears that the situation is in favour of textile sector, may take advantage, because it looks that demand for textile products may rise in the coming days, they said. In the meantime, after reports of less cotton sowing in the world cotton producing countries, prices may show firmness during the current year, as cotton was the worst performing commodity in the global market in 2011, they said.
According to Reuters, on Tuesday the cotton futures finished up and at a 1-1/2 week high, fuelled by sharp gains in agricultural commodities across the board and expectations of buying related to index rebalancing, analysts said. The key March cotton futures went up 4 cents or 4.4 percent to finish at 95.80 cents a lb, dealing from 91.85 to 95.80 cents. It was the highest settlement for cotton's spot contract since November 17, Reuters data showed. Traded volume on Thursday was around 25,000 lots, almost doubled its 30-day norm, Thomson Reuters preliminary data showed.
Other report said that the global cotton stocks could rebound after two tight seasons as China rebuilds its stockpile in 2011/12, an international farm group said on Tuesday. The International Cotton Advisory Committee (ICAC) secretariat said in a monthly report that a total of 2.1 million tonnes of domestic cotton were purchased for China's reserves between October 8 and December 30, 2011.
Reports indicate that about one million tonnes of non-Chinese cotton also will be added to the reserve, which was almost exhausted by the end of 2010/11, ICAC said. This could help send global cotton stocks up 32 percent to 11.9 million tonnes by the end of 2011/12, the group said.
US farmers are expected to plant less cotton in 2012 as a decline in prices to below $1 per lb and escalating costs of key inputs such as fuel make it more attractive to sow corn and soybeans. US cotton plantings will range from 12 million to 13.5 million acres (4.9-5.5 million hectares), down eight percent to 18 percent from last year's 14.72 million acres, industry participants forecast before the annual Beltwide Cotton conference here.
The following deals were reported: 200 bales of cotton from Kot Ghulam Mohd sold at Rs 3600, 400 bales of cotton from Kazi Ahmed at Rs 4400, 2000 bales of cotton from Upper Sindh at Rs 5250, 2000 bales of cotton from Haroonabad at Rs 5100/5150, 1200 bales of cotton from Faqir Wali at Rs 5100/5150, 1400 bales of cotton from Bahawal Nagar at Rs 5150, 400 bales of cotton from Burewala at Rs 5200, 2000 bales of cotton from Khanewal at Rs 5200/5500, 1000 bales of cotton from Hasil Pur at Rs 5250/5350, 1000 bales of cotton from Bahawal Pur at Rs 5350/5450, 800 bales of cotton from Fort Abbas at Rs 5375, 400 bales of cotton from Chani Goth at Rs 5450, 600 bales of cotton from Liaquat Pur at Rs 5450, 2000 bales of cotton from Sadiqabad at Rs 5500, 400 bales of cotton from Head Bekani at Rs 5500, 400 bales of cotton from Fazil Pur at Rs 5500, 400 bales of cotton from Shujabad at Rs 5500, 400 bales of cotton from Ghazi Ghat at Rs 5500, 400 bales of cotton from Shah Jamal at Rs 5500, 400 bales of cotton from Ali Pur at Rs 5500, 1400 bales of cotton from Rahim Yar Khan at Rs 5500/5550, 600 bales of cotton from Khan Pur at Rs 5550.
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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 03.01.2012
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37.324 Kgs 5,400 130 5,530 5,480 +50
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Equivalent
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40 Kgs 5,787 130 5,917 5,864 +53
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