Falling demand by mills and spinners pushed the prices lower on the cotton market on Wednesday, dealers said. Karachi Cotton Association (KCA) official spot rate was down by Rs 500 to Rs 12,000, they said. In Sindh and Punjab phutti price of low type was at Rs 4000 and that of superior type unchanged at Rs 5000, they said.
In ready business nearly 2,400 bales of cotton changed hands between Rs 10800-11500, they added. Some market players said that uncertain conditions on the global market disturbed the local cotton traders as, under the circumstances, they are unable to make any decision towards the future strategy.
On the other hand, the ginners, though having little unsold stock, are worried over the declining trend in the market, they added. The chief factor behind the falling demand by the mills is wait-and-see mood as they expect decline in the rates with the arrivals of phutti, which is likely in one or two months, other analysts said.
Additionally, exporters are out of focus mainly because of absence of demand by the overseas importers, they said. Furthermore, during the last several seasons, it appeared that despite the higher trend in the NY cotton futures, the local prices did not accept any influence, instead, the rates came down with gradual pace, they said.
The recession has hit the business activity the world over and nobody is in a position to say as to when it will be over, they said. Cotton related business in India and China also slackened due to falling demand, they added. On Tuesday the US cotton futures crumbled to a weak close as investors liquidated amid a broad sell-off in the commodity markets, and the bearish momentum could continue in the days ahead, analysts said.
The key May cotton contract on ICE Futures US dove 4.85 cents to settle at $1.9973 per lb, trading from $1.976 to $2.0608. The new-crop December cotton contract declined 3.62 cents to close at $1.3556. Total volume traded in the cotton market was around 30,500 lots, about a fifth above the 30-day norm, Thomson Reuters preliminary data showed.
The following deals were reported: nearly 200 bales of cotton from Mir Pur Khas sold at Rs 10800, 400 bales of cotton from Rohri at Rs 11500, 1000 bales from Faqirwali at Rs 11000, 400 bales from Mian Chanoon at Rs 11200 and 400 bales from Rahim Yar Khan at Rs 11500, they added.
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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 12.04.2011
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37.324 Kgs 12,000 120 12,120 12,620 -500
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Equivalent
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40 Kgs 12,860 120 12,980 13,516 -536
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