No change seen in obtaining outlook; small solo deal struck on cotton market

No visible change was seen in present outlook on the cotton market on Wednesday as mills are still adopting the wait-and-see mood just because of lull in the global market, dealers said. Karachi Cotton Association (KCA) official spot rate was steady at Rs 12,500, they said.
In Sindh and Punjab phutti price of low type was at Rs 4000 and superior type also unchanged at Rs 5000, they said. In ready business a solo deal of 400 bales of cotton from Haroonabad was reported at Rs 11,600 in the absence of active mills' demand, they added. According to the market sources, major buyers were not active as the ginners were not cutting down the present rates due to short crop. The ginners have some 0.2 or 0.3 million unsold bales , which are not enough to meet the local demand, country has to import more cotton to meet the local needs, they said.
In the meantime, it is expected that prices may fall slightly in the local market after the Indian move because it has converted China and Bangladesh importers due to cheaper rates, they said. Last week India's decision to remove registration condition on cotton yarn exports attracted the importers, they said.
On Tuesday the benchmark US cotton futures ended up 2.8 percent, on position juggling in heavy, indecisive trade before the release of a government crop report at the end of the week, brokers said. The key May cotton contract on ICE Futures US increased 5.51 cents to close at $2.0106 per lb, having ranged from down the seven-cent limit down at $1.8885 to up the daily limit at $2,0255.
The new-crop December cotton contract gained 1.67 cents to end at $1.3776. Total volume traded in the cotton market was around 41,500 lots, over two-thirds above the 30-day norm, Thomson Reuters preliminary data showed. The first estimates for the 2011/12 cotton season will be released by the USDA in its May production report.

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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 05.04.2011

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37.324 Kgs        12,500      120        12,620       12,620            NIL

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Equivalent

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40 Kgs            13,396      120        13,516       13,516            NIL

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