Steady trend prevailed on the cotton market on Friday as millers were ready to pay above the psychological levels, dealers said. The official spot rate was unchanged at Rs 5500, dealers said. In the ready session, around 2800 bales changed hands between Rs 5300-5800, they said. Seed cotton prices in Sindh were at Rs 2100-2700 and in Punjab at Rs 2500-3100, they said.
Market sources said that the millers and spinners making forward deals to replenish their inventories. Despite the slogans of business friendly atmosphere, cost of doing business is so high, they added. In fact, the millers were running short of cotton stock, preferring to pay higher rates to meet their needs, they said. Cotton analyst, Naseem Usman said that likely late arrivals of next crop is also a factor, forcing them to build their position.
Commenting on imposition of Gas Infrastructure Development Cess (GIDC), he said that traders were hoping that the government to provide a friendly environment to our industry so they could remain competitive in the international markets.
Reuters adds: ICE cotton futures fell for the fourth straight day on Thursday, hitting a four-week low after failing to maintain session highs hit immediately following the release of the US government's weekly export sales report, which traders said was supportive. Cotton contracts for July settled down 0.42 cent on Thursday, a 0.7 percent loss, at 63.73 cents per pound.
It traded within a range of 63.62 cents and 64.93 cents a pound. Net export sales for the week ended May 14 were 59,300 bales, up 22 percent from the prior week, according to data released Thursday by the US Department of Agriculture. The July contract's discount to December grew to 0.97 cent from 0.82 cent the prior session.
Total futures market volume fell by 1,647 to 27,500 lots. Data showed total open interest dropped by 2,069 to 185,550 contracts in the previous session. The following deals reported: 200 bales of cotton from Sanghar at Rs 4300, same figure from Vehari at Rs 4900, 400 bales from Burewala at Rs 5600, 1000 bales of cotton from Khanpur at Rs 5600-5700 and same figure from Yazman Mandi at Rs 5800 (conditional), they said.
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The KCA Official Spot Rate for Local Dealings in Pakistan 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 21.05.2015
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37.324 Kgs 5,500 150 5,650 5,650 NIL
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Equivalent
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40 Kgs 5,894 160 6,054 6,054 NIL
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