Ginners soften attitude, accept mills' bids as new phutti arrivals begin

Trading activity improved on the cotton market on Thursday as the ginners adopted soft attitude by accepting mills' bids, dealers said. The Karachi Cotton Association (KCA) official spot rate was at the overnight level at Rs 8,500, they said.
In Sindh prices of new phutti were quoted at Rs 3500-3550 and the rates old crop phutti in Sindh and Punjab, were of low type at Rs 2500 and that of superior type at Rs 3000, they said. In ready business nearly 8000 bales changed hands between Rs 7800-9100, they added.
According to market sources ginenrs showed interest in fresh selling as prices were matching with their psychological levels. Other factor was arrival of new crop phutti, which forced the ginners to dispose off the old stock to make room for the new crop, they said.
Commenting on the latest development after arrival of new crop, they said that rains in coastal Singh is good for the standing crop but if the rainfall changed into the floods and strong winds, that could be dangerious for the phutti production. In the meantime, prices may show stable trend as phutti arrival is not in big number or size and supply is there to meet properly the local demand and export consignments, they said. On Wednesday the US cotton futures closed mixed in largely spread and switch trade as players moved out of spot July while bracing for release of a pair of government reports tomorrow, analysts said.
The trade will be looking closely at the US Agriculture Department's monthly supply/demand report and its weekly export sales report when they are handed out at 8:30 am EDT (1230 GMT). The benchmark December cotton futures on ICE Futures US rose 0.22 cent to conclude at $1.3015 per lb, trading from $1.2778 to $1.314.
Last Thursday, the December contract finished at $1.3923 per lb, the highest settlement for the third position cotton contract since May 3. In the span of less than a week's trade, the market has lost 6.7 percent in value. Spot July cotton fell 3.58 cents to finish at $1.4505 per lb.
The December contract enjoyed technical support at the 21-day moving average of $1.2718 and the 50 percent correction in the move from $1.44 to $1.14, dealers said. Open interest in the cotton market was at 159,300 lots as of June 7, still within striking distance of the 161,193 lots in open interest on June 3, its loftiest level since April 20, the exchange data showed.
Total volume traded on Wednesday reached almost 33,400 lots, more than double the 30-day norm, Thomson Reuters preliminary data showed. According to a report, India on Wednesday, allowed an extra one million bales of cotton exports and will review within two months whether to permit further overseas sales of the fibre at a time when global demand appears to be flagging. India, had already allowed 5.5 million bales (1 bale = 170 kg) in the current cotton year which started in October.
The following deals were reported: 400 bales from Ghotki sold at Rs 8700, 200 bales from Burewala at Rs 9000, 200 bales from Qaboola at Rs 8650, 200 bales from Bahawal Pur at Rs 9000, 200 bales from Bahawal Pur at Rs 9100, 200 bales from Hasil Pur at Rs 7800, 337 bales from Hasil Pur at Rs 8400, 200 bales from Shujabad at Rs 8900, 200 bales from Faqeer Wali at Rs 8500, 1600 bales from Haroonabad at Rs 8500, 600 bales from Dera Ghazi Khan at Rs 9000, 200 bales from Khan Pur at Rs 8500, 800 bales from Kabbir Wala at Rs 9000, 900 bales from Makdom Rasheed at Rs 9000, 911 bales from Multan at Rs 9000, 400 bales (mill to mill) at Rs 8700 and 400 bales from Rahim Yar Khan at Rs 8600.

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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 08.06.2011

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37.324 Kgs       8,500       120       8,620        8,620               NIL

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Equivalent

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40 Kgs           9,109       120       9,229        9,229               NIL

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