Subdued business was seen on the cotton market on Thursday as mills preferred to be sidelined to observe the latest position, dealers said. The Karachi Cotton Association (KCA) official spot rate was left unchanged at Rs 8,500, they said. Prices of new Phutti came down by Rs 100 in both Sindh and Punjab at Rs 3,700 and Rs 3,800, they said.
In ready business, approximately, 1200 bales of cotton changed hands between Rs 8500-8775, they added. Some brokers said that the lack of buying interest by mills again seen as the ginners were not ready to lower the asking prices in anticipation of increase in the rates. Some other cotton traders said that the country has to import cotton to meet the export requirements and deals with different sources are in the pipeline.
Naseem Usman said "we have already imported nearly 0.8 million bales of cotton from India and it is also likely that if India lower the rates of cotton, we will make deal otherwise we will give up idea of import". "New phutti arrivals have started and condition is good, so we don't need to import because the country may achieve 15 million bales for the next season", analysts said.
On Wednesday the spot US cotton futures ended to their upside limit, as participants tried to cover their short positions ahead of the delivery period at week's end, but December cotton fell on news of spotty rains in drought-hit Texas, brokers said.
"At least we're getting a little bit of rain down here. We've been in severe drought," said Mike Stevens, an independent cotton analyst in Mandeville, Louisiana.
The key December cotton contract on ICE Futures US closed down 2.55 cents, a two percent decline, at $1.2145 per lb. The range ran from $1.1922 to $1.2545. Spot July soared four percent, a 6.49-cent gain that came close to the seven-cent daily limit, to finish at $1.6122. Volume traded in those two contracts came to a healthy 22,249 lots, Thomson Reuters preliminary data showed. The July contract gapped up at the open and rose to its highest level since June 6, as players still holding short positions in the expiring contract scrambled to cover them.
The following deals were reported: 200 bales of cotton from Haroonabad at Rs 8500, same figure (mill to mill), same number from Sadiqabad at Rs 8700, same figure from Karoor Pacca at Rs 8550, same number from Haroonabad at Rs 8750 and equal number from Burewala at Rs 8775.
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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 22.06.2011
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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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