Firmness prevailed on the cotton market on Thursday as prices resisted fresh fall amid mills' active buying, dealers said. The Karachi Cotton Association (KCA) official spot rate was maintained at overnight level: Rs 5,750, they said. Prices of seedcotton in Sindh were up by Rs 100 at Rs 2000-2600 and rates in Punjab also followed same pattern were higher by Rs 100 at Rs 2400-2700, they said.
In ready dealings about 18,000 bales of cotton changed hands between Rs 5,200-6,050, they added. Market sources said that transportation problem caused fall in business activity as mills and spinners were interested buyers but due to said reason they failed to finalise some deals at the lower rates.
Other analysts said that lower rates are an attraction for the buyers and exporters. It is expected that business volume may come down due to vehicle problem. According to report country has cut its forecast for cotton output to 12.22 million bales for the 2011/12 season, down nearly 800,000 bales, or about six percent, from earlier projections, hit by losses from heavy monsoon rains.
Besides, Egypt has imposed a temporary ban on cotton imports until the local crop has been sold, a financial newspaper reported on Thursday, saying there were problems in marketing the domestic harvest. "This procedure will help solve the marketing problem for local cotton which is currently facing difficulties," Salah Moawad, president of the agricultural services sector at the Agriculture Ministry, told newspaper al-Mal.
On Wednesday the US cotton futures settled higher on investor buying as the market climbed for the fourth straight session and analysts said fibre contracts are right back into the recent trading range. The key December cotton contract on ICE Futures US rose 0.64 cent to end at $1.0032 per lb, dealing from 99.48 cents to $1.0073. The session top is barely changed from Tuesday's contract peak of $1.0063.
Last Thursday the contract fell by almost three percent to end at 96.86 cents in the lowest settlement for the spot contract since September 2010. The market hit an intra-session low of 96.47 cents last week but rebounded quickly off that level. It was the first time in almost four weeks the December contract broke a trading band ranging from 98 cents to $1.04. The way cotton is behaving, independent analyst Mike Stevens in Louisiana said December is "back into that old trading (band) of 98 (cents) to $1.04."
The following deals were reported: 600 bales of cotton from Khair Pur sold at Rs 5200, 200 bales of cotton from Garh Maharaja at Rs 5600, 600 bales from Faqirwali at Rs 5650, 1000 bales from Yazaman at Rs 5700, 400 bales from Shujabad at Rs 5700, 600 bales from Haroonabad at Rs 5650-5650-5700, 1600 bales from Hasil Pur at Rs 5650-5800, 400 bales of cotton from Jahanian at Rs 5650-5700, 200 bales from Lodhran at Rs 5700, 400 bales of cotton from Multan at Rs 5700, 200 bales from Vehari at Rs 5700, 1000 bales from Bahawal Pur at Rs 5700, 600 bales of cotton from Ahmed Pur at Rs 5700, 800 bales of cotton from Chistian at Rs 5700, 1000 bales from Rahim Yar Khan at Rs 5750, 200 bales of cotton from Geley Wal Rs 5800, 200 bales of cotton from Shehar Sultan at Rs 5800, 200 bales of cotton from Bakkhar at Rs 5900, 1000 bales of cotton from Dera Ghazi Khan at Rs 5900, 1000 bales from Layyah at Rs 5900, 3000 bales from Rajan Pur at Rs 5900-6050, 600 bales from Shadan Lund at Rs 5900, 400 bales from Khanewal at Rs 5900, 400 bales from Mian Channo at Rs 5900, 1400 bales from Mian Wali at Rs 6000-6050 and 1200 bales from Fazil Pur at Rs 5900/6050.
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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 26.10.2011
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37.324 Kgs 5,750 130 5,880 5,880 NIL
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Equivalent
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40 Kgs 6,162 130 6,292 6,292 NIL
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