Activity improves as mills' demand increases; spot rate closes at Rs 6,300

Prices resisted steep fall on the cotton market on Saturday as mills increased buying, on the other hand, the ginners stopped selling in an effort to stabilise prices, dealers said. The Karachi Cotton Association (KCA) official spot rate was cut by Rs 100 to Rs 6,300, they said.
Prices of seedcotton in Sindh were inert at Rs 2000-2600 and rates in Punjab were unchanged at Rs 1800-2800, they said. In ready dealings nearly,10,000 bales of cotton changed hands between Rs 5,500-6,400, they added. According to the market sources, mills showed interest in fresh buying, which helped the prices to resist sharp decline. Only one deal was reported at Rs 4,800, mainly because of low quality, they said. On the other hand, the ginners also stopped panic selling, this strategy was good and helped in stabilising the rates, they said.
Naseem Usman was of the view that in the beginning week of October, prices may show improvement as a result of betterment in quality of phutti. On Friday the NY cotton futures finished higher defying a commodity-wide meltdown as mill and commercial buying enabled the market to end the session as virtually the only winner in a beleaguered commodity sector.
Gold hit a seven week low as it fell a record $100 in a selling spree that kept the metal on track for its third worst day in two decades. "The lower prices bought buyers out of the woodwork," said Sharon Johnson, senior cotton analyst at commodity brokerage Penson Futures in Atlanta. "I would think we're going to see some follow-through buying next week."
The key December cotton contract on ICE Futures US climbed 1.95 cents or nearly two percent to close at $1.0124 a lb, moving from 99 cents to $1.02. On the week, the market is down 8.4 percent in its worst weekly loss since July 17. On Thursday, it ended at 99.29 cents a lb, marking only the first time since August. 11 when the second position cotton contract closed under the psychological $1 per lb mark.
Total volume traded on Friday hit above 13,200 lots, over 10 percent above the 30-day norm, preliminary Thomson Reuters data showed. Total volume traded Thursday in the cotton market reached 22,185 lots, versus the previous session's count at 15,954 lots, ICE Futures US data showed.
The following deals were reported: 200 bales of cotton from Jhole (Lower Quality) at Rs 4800, 600 bales of cotton from SDU at Rs 5500/5800, 3000 bales of cotton from Khairpur & Upper Sindh at Rs 5800/6200, 200 bales of cotton from Khanewa at Rs l6400, 400 bales of cotton from Shahdan Lund at Rs 6300, 200 bales of cotton from Tonsa Sharif at Rs 6300, 200 bales of cotton from Mian Channu at Rs 6300, 200 bales of cotton from Tiba Sultan Pur at Rs 6300, 200 bales of cotton from Kabir wala at Rs 6300, 200 bales of cotton from Multan at Rs 6300, 600 bales of cotton from Burewala at Rs 6200/6250, 200 bales of cotton from Gaggo Mandi at Rs 6250, 200 bales of cotton from Vehari at Rs 6200, 200 bales of cotton from Bakhar at Rs 6200, 200 bales of cotton from Marot at Rs 6200, 200 bales of cotton from Bhawal Pur at Rs 6200, 200 bales of cotton from Yazman Mandi at Rs 6200, 400 bales of cotton from Chichawatni at Rs 6000/6100, 200 bales of cotton from Daranwala at Rs 6000, 200 bales of cotton from Chistian at Rs 6000, 200 bales of cotton from Dunia Pur at Rs 6000, 200 bales of cotton from Rahim Yar Khan at Rs 6000 and 200 bales of cotton from Ghazi Abad at Rs 5800.

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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 23.09.2011

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37.324 Kgs       6,300       130       6,430        6,530              -100

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Equivalent

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40 Kgs           6,752       130       6,882        6,989              -107

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