Firm trend persists on cotton market

Firmness prevailed in the cotton market at the last day of the out-going fiscal year (2006-07) on Saturday as both buyers and sellers adopted the cautious attitudes after the rains in both Punjab and Sindh, dealers said.
The Karachi Cotton Association (KCA) official spot rate, keeping at the overnight level at Rs 2650, they added. Surprising and unexpected increase in the New York cotton futures propelled the people related with the cotton trade to make up the consumption and enhance capacity or keep on forward buying, as well, analysts said.
Locally, on the one hand, timely rains rising expectation for good crop without any damages to the standing crop in the fields, instead the recent rains may help in improving the quality of the cotton, they said.
But on the other hand, rising demand has pushed the prices up in globe and locally, the rates were also on the upward march. This is the main concern behind the uncertainty among the spinners and mills, they said.
There were some speculations in the market that a deal of 1000 bales of cotton done at Rs 3000 between mill to mill but it was not confirmed, dealers said. The cotton market turned bullish in the New York as the US cotton futures rose four percent to a new contract high on Friday after a government crop report put cotton plantings at the 18-year low.
The US Agriculture Department estimated upland cotton plantings for 2007 at 10.760 million acres - the lowest since 1989 and down from industry analysts' projections of 11.5 million to 11.6 million acres for the current year.
The New York Board of Trade's key December cotton contract opened up 3.7 percent at 63.90 cents a lb. At 10:45 am EDT (1445 GMT), it was trading 4.4 percent higher at a contract peak of 64.30 cents.
Intercontinental Exchange's NYBOT electronic platform for cotton showed the December contract up 4.33 percent at 64.29 cents at 10:45 am A deal of Rs 2900 of 2000 bales of cotton finalised between mill to mill, dealers said.

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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      2650.00        50                    2700.00

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

40 Kgs         2840.00        50                    2890.00

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