Unforeseen fears about the size of cotton production for the coming season kept the prices firm on the cotton market on Thursday, experts said. The Karachi cotton Association (KCA) official spot rate was unchanged at Rs 3800, dealers said.
Mills indulged in forward buying of cotton on rising apprehensions about the production of cotton for the coming season, leading cotton analyst Naseem Usman said.
Besides, shortage of irrigation water was also a big concern because it is causing a delay in sowing. It is feared that the mealy bug may attack the standing crop, they said. Additionally, the mills are also under pressure due to the rising prices, they added.
On Wednesday, New York cotton futures settled firmer on investor short-covering as the market reversed course and the trade digested news of sizeable losses in the top growing state of Texas, brokers said.
The key December cotton contract rose 1.10 cents to conclude at 82.05 cents per lb, dealing from 80.10 to 82.08 cents. Spot July cotton gained 1.01 cents to 73.82 cents, trading from 72.07 to 73.98 cents. Volume traded in the December contract stood at 12,388 lots at 2:51 pm EDT (1851 GMT) while July volume was at 3,576 lots.
The following deals were reported as some 200 bales of cotton from Dherki at Rs 3850 and same figure from Sultanabad at Rs 3800 (August delivery), they 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 3,800.00 50 3,850.00
Equivalent-------------------------------------------------
40 Kgs 4,072.00 50 4,122.00
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