Firmness prevailed on the cotton market on Thursday as needy mills and spinners stuck deals despite the upward trend in prices, brokers said. The Karachi Cotton Association (KCA) spot rate was unchanged at Rs 9700, they said.
Seedcotton prices on the upward march in Sindh and Punjab were at Rs 3,900-4,600, they said.
In ready business, nearly, 20,000 bales of cotton changed hand between Rs 9,300-10,000, they added.
Commenting on the latest development on the cotton market some leading analysts said that trading activity picked up as urgent needs propelled some mills and spinners to make purchases to run their business. They said that during the last session business came down as price ideas of both buyers and sellers failed to get a matching ground owing to volatility in the NY cotton futures. They said that latest Pakistan Cotton Ginners Association (PCGA) fortnightly report showed a shortfall of 1.7 million bales, indicating that prices may go up further in the coming days. This is the main factor, which is encouraging the ginners to hold the unsold stock for the better profit.
The mills and spinners, however, were not ready to pay beyond the export parity levels, causing slow down in the physical activity in the last sessions. But today, some needy mills and spinners made purchases to meet the urgent requirements and partly because of rising fears of further increase in the current rise, they added. In the meantime, it appeared that many spinners were not willing to procure cotton above Rs 10,000 level in the short-run, they added.
On Wednesday, fund buying and system trades lifted US cotton futures, but late selling pulled prices off their highs as indexes re-balanced cotton holdings to align with new weightings for 2011 and some speculators grabbed profits.
Cotton showed modest losses in early business, then turned sharply higher around midday as the commodities complex suddenly reversed course and rallied.
Market players said they thought algorithmic trading, or quickly executed programmed trades, were behind the sudden price gains, both on Tuesday and Wednesday.
Benchmark March cotton on ICE Futures US closed with a 1.42-cent gain, up 0.99 percent, at $1.4520 per lb. The contract neared its four-cent daily move limit to set a one-week peak at $1.4778 but quickly eased back.
Volume was 9,892 for the March contract, exceeding the 8,818 contracts traded on Tuesday. Tuesday's total count also rose to 17,759 lots, an increase over the 12,176 lots logged on Monday, according to ICE data.
The following deals wee reported: 1000 bales of cotton from Mir Pur Khas sold at Rs 9350-9500, 400 bales of cotton from Shahdadpur at Rs 9500, 200 bales of cotton from Sahari at Rs 9600, 200 bales of cotton from Kotri at Rs 9600, 600 bales of cotton from Nawabshah at Rs 9600, 2000 bales of cotton from Khair Pur at Rs 9800, 3000 bales of cotton from Upper Sindh at Rs 9800-9900, 200 bales of cotton from Chichawatni at Rs 9500, 400 bales of cotton from Faqirwali at Rs 9500, 600 bales of cotton from Haroonabad at Rs 9500, 200 bales of cotton from Gojra at Rs 9600, 200 bales of cotton from Khanewal at Rs 9700, 200 bales of cotton from Karor Pacca at Rs 9700, 200 bales of cotton from Tonsa Sharif at Rs 9700, 800 bales of cotton from Rajan Pur at Rs 9700-9800, 800 bales of cotton from Bahawal Pur at Rs 9800, 200 bales of cotton from Yazman Mandi at Rs 9800, 200 bales of cotton from Burewala at Rs 9800, 2400 bales of cotton from Rahim Yar Khan at Rs 9800-9900, 200 bales of cotton from Muhammad Pur at Rs 9800, 200 bales of cotton from Liaquat Pur at Rs9800, 600 bales of cotton from Ali Pur at Rs 9800, 600 bales of cotton from Kabirwala at Rs 10000, 400 bales of cotton from Dera Ghazi Khan at Rs 10000.
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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 05.01.2011
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37.324 Kgs 9,700 120 9,820 9,820 NIL
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Equivalent
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40 Kgs 10,395 120 10,515 10,515 NIL
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