Trading activity improved on the cotton market on Thursday as ginners called off strike when authorities assured that Withholding Tax (WHT) on farm products has been deferred till March 31, 2011, dealers said. The Karachi Cotton Association (KCA) spot rate was inert at Rs 10,600, they said.
Phutti prices in Sind and Punjab were at Rs 4200-4700, they said. Since January 16, the Punjab grain market stopped business after the decision to levy withholding tax. According to the Pakistan Cotton Gainers Association (PCGA), the Federal Board of Revenue (FBR) imposed 3.5 percent withholding tax on agriculture products and the ginning factories had suspended buying of seed cotton. In the ready business about 16,000 bales of cotton changed hands between Rs 10,350-11,100, they added.
Some brokers said that business was good despite the higher prices as needy mills did buying to meet their immediate requirements. It is expected that rates may maintain the present levels following the track of other cotton producing states. Other factor is that the ginners were not lowering the asking prices due to said reason, they added. On Wednesday the US cotton futures finished up the daily limit on another round of speculative and fund buying as players eyed release of a government sales report to gauge demand for the fibre, analysts said.
The cotton market has jumped almost 20 percent since the middle of January, fuelled by robust prices in top consumer China although the Chinese are stepping away for the Lunar New Year festivities which get going next month. The key March cotton contract on ICE Futures US rose the 5.00 cent limit to close at $1.6683 per lb, short of the new record high at $1.6789 set on Tuesday. The low for the session was at $1.6081. Total volume stood at 17,100 lots, about five percent below the 30-day norm, Thomson Reuters preliminary data showed.
The following deals were reported: 800 bales of cotton from Tando Adam sold at Rs 10350-10500, 1000 bales of cotton from Shahdad Pur at Rs 10400/10500, 400 bales of cotton from Rohri at Rs 11000, 400 bales of cotton from Ghotki at Rs 11000, 400 bales of cotton from Layyah at Rs 10600, 200 bales of cotton from Rajan Pur at Rs 10600, 400 bales of cotton from Bakkhar at Rs 10800, 400 bales of cotton from Tounsa Sharif at Rs 10800, 400 bales of cotton from Noor Pur at Rs 10800, 1400 bales of cotton from Shadan Lund at Rs 10500-11000, 1200 bales from Mian Channu at Rs 11000, 400 bales of cotton from Rajan Pur at Rs 11000, 400 bales of cotton from Dera Ghazi Khan at Rs 11000, 400 bales of cotton from Burewala at Rs 11000, 400 bales of cotton from Haroonabad at Rs 11000, 1000 bales of cotton from Uch Sharif at Rs 11000, 1800 bales of cotton from Rahim Yar Khan at Rs 11000, 400 bales of cotton from Khan Pur at Rs 11000, 400 bales of cotton from Sadiqabad at Rs 11000, 1400 bales of cotton from Fazil Pur at Rs 11000-11100, and 3000 bales of cotton from Mian Wali at Rs 11000-11100.
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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 26.01.2011
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37.324 Kgs 10,600 120 10,720 10,720 NIL
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Equivalent
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40 Kgs 11,360 120 11,480 11,480 NIL
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