Official spot rate was cut down sharply by the Karachi Cotton Association (KCA), dealers said on the cotton market on Thursday.

The Karachi Cotton Association (KCA) spot rate was brought down by Rs 400 to Rs 8,800.

Seed cotton prices in Sindh and Punjab were unchanged at Rs 3,800-4,000, they said.

In ready business trading activity was moderate despite falling trend in prices and some 24,000 bales of cotton changed hands between Rs 8,300-9,000, they added.

Market sources said the exporters and mills indulged in short buying to meet the near-term needs and this factor may push the prices further lower in the near future.

In fact the cotton traders had adopted wait-and-see due to several factors.

One reason, which is expected on Friday, is USDA monthly data on cotton crop, they said.

In the domestic and international market cotton traders were hoping prices will be stabilised after the data, some brokers said.

Which factor is dominating the domestic market most likely is, steady phutti arrivals and partly because of less buying interest among the leading buyers, they added.

It is expected that prices may drift lower in the market ahead of Muharram holidays, they said.

Prices may move both ways in the world market, they expect.

According to a report, the NY cotton futures already near record highs may get a further boost from a US Agriculture Department (USDA) monthly crop report due out on Friday in a market that is the best performing commodity for 2010.

Total world cotton supplies have dropped by a total of 11.23 million (480-lb) bales since the USDA's June report to the current 160.47 million bales.

The market's historic bull-run in 2010 has been fuelled in part by the fact that world consumption has outpaced production for the past five seasons.

On Wednesday the US cotton futures closed mixed as players braced for reports due from the US Agriculture Department (USDA) on Thursday and Friday, brokers said.

The benchmark March cotton contract on ICE Futures US rose 1.58 cents to end at $1.3195 per lb, after moving from $1.2642 to $1.3372.

The rest of the board ranged from 2.60 cents lower to 0.89 cent firmer.

Volume traded hit 24,762 lots, over a third below the 30-day average of 35,335 lots, Thomson Reuters preliminary data showed.

The following deals were reported: 1600 bales of cotton from Mir Pur Khas-Sultanabad sold at Rs 8500-8600, 1200 bales of cotton from Shahdad Pur at Rs 8700, 1000 bales of cotton from Nawabshah at Rs 8700-8800, 1000 bales of cotton from Sanghar at Rs 8500-8600, 400 bales of cotton from Moro at Rs 8850, 1000 bales of cotton from Khair Pur at Rs 8800-8850, 2000 bales of cotton from Upper Sindh at Rs 9000, 600 bales of cotton from Shadan Lund at Rs 9000, 600 bales of cotton from Bahawal Pur at Rs 9000, 800 bales of cotton from Ali Pur at Rs 9000, 1000 bales of cotton from Rajan Pur at Rs 9000, 1400 bales of cotton from Fazil Pur at Rs 9000, 400 bales of cotton from Hasil Pur at Rs 9000, 2000 bales of cotton from Rahim Yar Khan at Rs 9000, 1000 bales of cotton from Lodhran at Rs 9000, 400 bales of cotton from Ahmed Pur at Rs 9000, 200 bales of cotton from Yazman Mandi at Rs 8850, 1000 bales of cotton from Mian Chano at Rs 8800, 600 bales of cotton from Burewala at Rs 8800, 1800 bales of cotton from Jalal Pur at Rs 8800, 1800 bales of cotton from Shujabad at Rs 8800, 600 bales of cotton from Chichawatni at Rs 8650-8800, 200 bales of cotton from Duniya Pur at Rs 8500, 200 bales of cotton from Haroonabad at Rs 8500 and 200 bales of cotton from Vehari at Rs 8300.

=========================================================================== The KCA Official Spot Rate for Local Dealings in Pak Rupees --------------------------------------------------------------------------- FOR BASE GRADE 3 STAPLE LENGTH 1-1/32" --------------------------------------------------------------------------- MICRONAIRE VALUE BETWEEN 3.8 TO 4.9 NCL =========================================================================== Rate Ex-Gin Upcountry Spot Rate Spot Rate Difference For Price Ex-Karachi Ex.<br/><br/>KHI.<br/><br/>As Ex-Karachi on 08.12.2010 =========================================================================== 37.324 Kgs 9,800 120 8,920 9,320 -400 --------------------------------------------------------------------------- Equivalent --------------------------------------------------------------------------- 40 Kgs 9,431 120 9,551 9,980 -429 ===========================================================================

Copyright Business Recorder, 2010

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