Both the buyers and sellers puzzled under the prevailing situation, dealers said on the cotton market on Friday. The official spot rate was unchanged at Rs 7,600, they added.
In ready session, only 14,000 bales of cotton changed hands between Rs 5500-8000, they said. In both Sindh and the Punjab, seed cotton prices were same at Rs 2800 and Rs 3300, they said. Some analysts said that several mills showed interest in fresh buying but ginners were not lowering the asking prices. They said that both buyers and sellers were in dilemma due to delay in issuance of Statutory Release Order (SRO) after the withdrawal of Customs Duty and Sales Tax duties on import of cotton from India.
In the meantime, a number of mills finalised deals to replenish their stock, they said. Cotton analyst, Naseem Usman said that it is pre-time to say about the future direction of the local market but it looks prices to stay firm in the coming days.
According to the reports, Indian cotton traders have cancelled contracts to export some 400,000 bales of the fibre after a rally in domestic prices and the rising rupee made overseas sales unattractive, the president of the Cotton Association of India told Reuters. The switch, triggering penalty payments by traders, has left cotton buyers in leading markets like Bangladesh, Vietnam and China seeking to make up shortfalls by tapping suppliers in the United States, Australia and Brazil, said association head Atul Ganatra.
Adds Reuters: ICE cotton futures surged nearly 4 percent on Thursday to settle limit up, buoyed by strong export sales report, prompting the exchange to raise the daily trading limit to 5 cents per pound effective Friday. The session best level of 82.65 cents was an all-time high for the March contract and a peak since May 2014 for cotton futures.
Total futures market volume rose by 29,341 to 62,103 lots. Data showed total open interest gained 2,151 to 288,105 contracts in the previous session. The following deals reported: 400 bales of cotton from Sakrand at Rs 7200, 200 bales from Karachi at Rs 5500, 6900 bales from R. Y. K at Rs 8000, 2400 bales from Fazilpur at Rs 8000, 1400 bales from Sadiqabad at Rs 8000, 1000 bales from Jalalpur at Rs 7600, 1000 bales from Uch Sharif at Rs 7500, 634 bales from Yazman Mandi at Rs 7400 and 800 bales from Fort Abbas at Rs 7825, they said.
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The KCA Official Spot Rate for Local Dealings in Pakistan Rupees
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FOR BASE GRADE 3 STAPLE LENGTH 1-1/16"
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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 11.01.2018
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37.324 kg 7,600 145 7,745 7,745 NIL
Equivalent
40 kgs 8,145 155 8,300 8,300 NIL
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