As a result of ginners' hasty attitude, prices fell further on the cotton market on Wednesday, dealers said The Karachi Cotton Association (KCA) official spot continued fall, curtailed by Rs 200 to Rs 5,800, they said.
Seedcotton rates in Sindh extended overnight fall, losing Rs 50-100 to Rs 2650-2700, while in Punjab prices maintained overnight levels at Rs 2400-2600, they said.
In the ready business, over 7000 bales of cotton changed hands between Rs 5500-5900, dealers added. According to the market sources mills did buying as the ginners were ready to sell at their psychological levels and it looks that prices may fall more in the near future.
It was observed that despite the higher trend in the NY cotton market, prices failed to recover due to rising trend in cotton production, they said.
They attributed the fresh fall in the rates to reports about the increase in cotton production the world over against the last year. They also said that if exporters enter the market, rates may not fall sharply in the coming days. They also said that sliding trend, may attract cotton importing countries, may start buying to meet their needs.
On Tuesday the cotton futures settled higher on investor short-covering as the market rebounded from its fall in the previous session to a nine-month low although players are still fretting over the unresolved debt woes in the United States and Europe, analysts said. Fundamentally, the market is still wrestling with demand destruction after prices hit a record over $2 per lb this spring.
The key December cotton futures on ICE Futures US gained the four-cent daily limit to end at $1.0084 per lb, with the session low at 97 cents.
On Monday the contract finished at 96.46 cents in the lowest close for the second-position contract since early October 2010, Thomson Reuters data showed.
Business was light after two consecutive sessions of heavy dealings. Total market volume hit around 10,200 lots at 2:42 pm EDT (1842 GMT), nearly 50 percent below the 30-day norm, Thomson Reuters preliminary data showed.
The following deals were reported: 1000 bales of cotton from Sanghar sold at Rs 5700-5800, 400 bales from Tando Adam at Rs 5700-5800, 200 bales from Mir Pur Khas at Rs 5500 (delivery for 1st Aug), 1600 bales of cotton from Shahdad Pur done at Rs 5700-5800, 400 bales from Hyderabad at Rs 5700, 200 bales from Tando Jan Mohd at Rs 5700, 800 bales from Burewala at Rs 5800-5900, 400 bales from Khanewal at Rs 5700-5800, 200 bales from Arifwala at Rs 5700, 400 bales from Chichawatni at Rs 5800, 400 bales from Pak Pattan at Rs 5700-5800, 200 bales from Mian Chanun at Rs 5750, 200 bales from Chistian at Rs 5700 and 400 bales from Gajjo at Rs 5700.
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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 19.07.2011
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37.324 Kgs 5,800 120 5,920 6,120 -200
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Equivalent
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40 Kgs 6,216 120 6,336 6,550 -214
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