Official spot rate was higher on the cotton market on Friday amid thin activity, dealers said. The Karachi Cotton Association (KCA) official spot rate was appreciated by Rs 200 to Rs 6,400, they said. In the ready business over 5000 bales of cotton changed hands between Rs 6150-6600 in process of trading, they added.
Market sources said that business was low as a result of slow arrival of phutti because picking operation slowed down in the cotton belt after fresh rains. Rains are good for the crop but stagnant water is causing hurdle in picking operation, dealers said. Naseem Usman said that after the recant rains, water is stagnant in some parts of cotton growing areas in Badin, Sukkur and Mir Pur Khas, and this is not good for crop because it is feared that this factor can damage the production a little bit.
Tight supply on the other hand is causing increase in the prices, other brokers said. It is very interesting to notice that during the same period last year, prices hit all-time high mark due to strong demand amid short supply but when reports are reaching about good production the world over, prices are coming down particularly in the US. Other reports showed that the US cotton market had a tepid reaction to a key government crop report on Thursday as some traders said the estimate for US 2011/12 cotton production was too high.
USDA forecast US 2011/12 cotton production at 16.55 million (480-lb) bales, up from 16 million estimated last month and above a Reuters survey which pegged it at an average of 15.29 million bales. World cotton ending stocks for 2011/12 were raised, while production and consumption were cut.
In the meantime, China imported 157,100 tonnes of cotton in July, up 30.89 percent from the previous month, the China Cotton Association said on Thursday, citing customs data. The figure was seven percent lower than the same period of 2010, the association said.
Imports for the first seven months of 2011 reached 1.48 million tonnes, down 13.3 percent compared to the same period of last year, it said. On Thursday the US cotton futures finished easier on late investor sales after an early flurry of short-covering faded while the trade digested the results of a key government crop report, analysts said. The key December cotton contract on ICE Futures US fell 1.28 cents to finish at 96.52 cents per lb, trading from 95.78 to 99.36 cents. The range almost matched the 95.76 to 99.03 cents range on Wednesday.
The market stayed within the wide Tuesday range of 93.72 cents to $1.039. On Tuesday, the contract finished at 95.80 cents in the lowest settlement for the second position since the middle of September 2010, Thomson Reuters data showed. Total volume traded hit almost 11,000 lots, over a fifth below the 30-day norm, Reuters data said.
The following deals were reported: 200 bales from Nawab Shah sold at Rs 6150, 400 bales from Khanewal at Rs 6500-6600, 400 bales from Qutub Pur at Rs 6500-6600, 200 bales from Pak Pattan at Rs 6600, 200 bales from Gajjo mandi at Rs 6600, 400 bales fro Bahawal Pur at Rs 6400-6500, 400 bales from Hasil Pur at Rs 6500, 200 bales from Kabirwala at Rs 6500, 200 bales from Vehari at Rs 6500, 200 bales from Jahanian at Rs 6500, 200 bales from Multan at Rs 6500, 200 bales from Haroonabad sold at Rs 6550, 200 bales from Chistian at Rs 6500, 200 bales fro Ahmed Pur at Rs 6500, 200 bales from Bakhar at Rs 6450, 200 bales from Mamo Kanjan at Rs 6450, 200 bales from Bahawal Pur at Rs 6400 and 200 bales from Khan Pur at Rs 6400.
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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 11.08.2011
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37.324 Kgs 6,400 130 6,530 6,330 +200
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Equivalent
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40 Kgs 6,859 130 6,989 6,775 +214
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