Cotton market: prices rise over fears of short supply of quality lint

Prices went up on the cotton market on Wednesday on fears of short supply of quality lint, dealers said. The official spot rate was inert at Rs 6250, dealers said. In Sindh, seed cotton prices were at Rs 2600-3300, they said that in Punjab, phutti rates were at Rs 2800 and Rs 3550, as per 40 kg, they added. In the ready session, over 20,000 bales of cotton changed hands between Rs 6040-6625, they said.
Market sources said that rates of quality lint moved with slight gains and it is most likely that rates may continue an upward journey due to said reason. According to reports, Pakistan has rejected a consignment of 10,000 bales for Indian cotton. Cotton analyst, Naseem Usman said that after this move, the country would face shortage of quality lint cotton.
Country is already facing lower-than-expected cotton production this year, furthermore, these factors were creating apprehensions for exports of textile products, he added. Other experts observed that textile sector is facing hard challenge because of tough competition in the international markets. Pakistan would have to import cotton from other sources and will pay higher rates, as well, they said. So cost of production would go up and there are rising apprehensions that Pak products may face tough challenges and competition because of higher rates, as well. In the meantime, under the circumstances, it is interesting to note that spinners were keen to enter into big deals, but on the other hand the ginners were trying to hold back stocks in order to get higher prices in the near future, they said.
Reuters adds: Cotton futures edged higher on Tuesday and marked its highest one-day percentage rise in about a week, on buying by mills, but gains were capped by a stronger dollar. The March cotton contract on ICE Futures US settled up 0.32 cent, or 0.45 percent, at 71.33 cents per lb. It was the highest one-day percentage gain since November 28. It traded within a range of 70.85 cents and 71.69 cents a lb.
The following deals reported: 800 bales from Daur at Rs 6040, 600 bales from Shahdadpur at Rs 6050, 2000 bales from Salehpat at Rs 6275/6300, 1200 bales from Rohri at Rs 6450, 800 bales from Pano Aqil at Rs 6500, 1800 bales from Dharki at Rs 6500, 1000 bales from Ghotki at Rs 6500, 400 bales from Mianwali at Rs 6000, 400 bales from Bhakar at Rs 6250, 1400 bales from Haroonabad at Rs 6300/6350, 400 bales from Dharanwala at Rs 6350, 600 bales from Bahawalpur at Rs 6450, 800 bales from Jalalpur at Rs 6450, 800 bales from Shujabad at Rs 6450, 800 bales from Yazman Mandi at Rs 6450/6500, 600 bales from Khanewal at Rs 6475, 600 bales from Sadiqabad at Rs 6500, 600 bales from Rahim Yar Khan at Rs 6500, 800 bales from Layyah at Rs 6550 and 1600 bales from Kabirwala at Rs 6625, dealers 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 06-12-2016

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37.324 kg          6,250      135        6,385         6,385            NIL

Equivalent

40 kgs             6,698      145        6,843         6,843            NIL

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