Trading activity was down on the domestic cotton market on Thursday as leading buyers were on sidelines due to several factors, dealers said. The Karachi Cotton Association (KCA) spot rate was slashed by Rs 100 to Rs 9,400. Seed cotton prices in Sindh and Punjab also fell by Rs 100 to Rs 3,900-4,200, they said.
In ready business nearly 10,000 bales of cotton changed hand between Rs 8,800-9,700, they added. Some brokers said that prices came down following the slide in demand by the mills due to continued fall in the NY cotton futures. Additionally, mills are on the sidelines due to year-end payments and financial crunch. It is more likely that business may slow down ahead of long weekend, New Year and local holiday in the coming days, they said.
In the meantime, one more pre-cautionary measure was taken by the Indian cotton authority, as according to a report, it stopped exports of cotton yarn temporarily to save the country's garment industry, they said. This factor may cause little concern among the cotton traders in the coming days, they added. They also said that price fall is likely to continue between Rs 8,800-9,300, they said.
On Wednesday the US cotton futures ended down the five-cent daily limit on profit-taking and investor liquidation one day-after the market hit a record top, and analysts believe cotton may see follow-through pressure before the long Christmas break. The market will be closed on Friday and reopen on Monday at 7:30 am EST (1230 GMT).
The key March cotton contract on ICE Futures US fell the five-cent limit to finish at $1.5412 per lb. After finishing limit up the last two sessions, the market headed the other way on Wednesday. Cotton's performance called to mind its performance on November 10, when it traded the daily limit up before finishing almost limit down. The May cotton contract on the Zhengzhou Commodity Exchange last traded 1,135 yuan lower on the day at 27,640 yuan per tonne.
The following deals were reported: 800 bales of cotton from Sanghar sold at Rs 8900-9000, 200 bales of cotton from Huderabad at Rs 9100, 1000 bales of cotton from Kharipur at Rs 9500, 1000 bales of cotton from Upper Sindh at Rs 9500-9700, 3200 bales of cotton from Rahim Yar Khan at Rs 9500, 400 bales of cotton from Mian Chunno at Rs 9500, 1000 bales of cotton from Bahawalpur at Rs 9200-9250, 800 bales of cotton from Hasilpur at Rs 9250, 200 bales of cotton from Yazman Mandi at the same rate, 400 bales of cotton from Haroonabad at Rs 9200 and same figure from Chichawatni at the same rate.
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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 22.12.2010
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37.324 Kgs 9,400 120 9,520 9,620 -200
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Equivalent
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40 Kgs 10,074 120 10,194 10,301 -107
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