Cotton buyers prefer to remain on sidelines

Dullness prevailed on the cotton market on Saturday as both mills and spinners mainly kept on the sidelines as many of them covered the near-term requirements, their dealers said. The Karachi Cotton Association (KCA) official spot rate was unchanged at Rs 2275, without upcountry expenses.
According to the market sources, last sessions on the cotton market observed sluggish business as leading buyers had already bought enough from the Trading Corporation of Pakistan (TCP) for their needs.
So far, the TCP has sold nearly 5000,000 bales of cotton and still it has about 1.1 million bales of cotton, which are in good condition and to follow the Prime Minister's directive, the TCP has to sell-off all unsold stock till 15 August, cotton and textile analysts said.
Ginners, who have small number of cotton bales seem not interested in selling despite the fact that the quality of cotton is not as good as anticipated a few weeks ago, they added.
Due to this factor, the mills mulling to import best quality of cotton to meet the requirements of the World Trade Organisation (WTO).
Market sources said that to promote the textile exports of their countries, under the WTO scenario, the officials from Pakistan and China with other regional states met in Shanghai to participate the conference, reviewed the strategies to face the competition in the field.
Reuters added: the NY cotton futures finished on Friday at a six-week high on speculative fund buying and concern over possible hot and dry weather in several cotton-producing countries next week, analysts said.
The New York Board of Trade's key December cotton contracts soared 1.33 cents to finish at 54.79 cents a lb., near the top of its 53.64 to 54.80 cents band.
It was the highest close for the contract since ending at 55.11 cents on May 12. The spot July contract rose 0.48 cent to 50.13 cents. The rest gained 1.00 cent to 1.21 cents.

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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"

 MICRONAIRE VALUE BETWEEN 3.8 TO 4.9 NCL

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Rate           Ex-Gin     Upcountry    Spot Rate Ex-Karachi

for            Price                        Sales Tax @ 15%

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37.32 Kgs      2275.00        50                    2325.00

Equivalent-------------------------------------------------

40 Kgs         2438.00        50                    2488.00

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