Firm trend but no deal on cotton market

Steady trend was seen on the cotton market on Friday as the leading mills kept were on the sideline to analyse the prevailing situation after the rains in both Punjab and Sindh, dealers said. The Karachi Cotton Association (KCA) official spot rate was unchanged at Rs 2600, they added.
The developing situation may not be favourable for the spinners as continued rain can play havoc resulting in jump in the cotton prices, they said. Some brokers said that after finalising some deals at Rs 2800, indications are the pries may rise in the coming days after the fresh rain in both provinces Sindh and Punjab.
The ginners, under the circumstances, were looking relaxed and hoping that the spinners will not feel any hesitation in obliging them even at the higher prices. It means, there is going to start a tug-of-war between ginners and mills, they said.
The game is again in favour of ginners, who have no huge stock of unsold cotton. They can sell it, if they choose, within no time, they said. Mixed pictures may emerge during the current rainy season, firstly the spinners likely to increase the forward buying in anticipation of further increase in the prices and secondly, they may adopt a wait-and-see policy to analyse the prevailing situation, experts said.
They said uncertainty is bound to prevail when the NY cotton futures are mainly depicting upward trend and the picture is vague about the size of current crop.
The New York cotton futures moved both ways amid speculative trading as the New York Board of Trade's open-outcry July cotton contract surged 0.75 cent to end at the day's peak of 56.50 cents per lb, with the session low at 55 cents. It was the highest close for cotton on a spot basis since late February.
The benchmark December cotton contract rose 0.08 cents to close at 61.50 cents, having traded from 60.65 to 61.70 cents. Three contracts aside the rest added 0.05 cent.
Intercontinental Exchange's NYBOT electronic cotton market showed the July contract up 0.71 cent to 56.46 cents at 2:33 pm EDT (1833 GMT). No one deal was reported till our going to press.

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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"

 MICRONAIRE VALUE BETWEEN 3.8 TO 4.9 NCL

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Rate           Ex-Gin     Upcountry    Spot Rate Ex-Karachi

for            Price                        Sales Tax @ 15%

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37.32 Kgs      2600.00        50                    2650.00

Equivalent-------------------------------------------------

40 Kgs         2786.00        50                    2836.00

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