Lean business was seen on the cotton market on Thursday as mills kept to sidelines in anticipation of further decline in the rates, dealers said. Karachi Cotton Association (KCA) official spot rate was unchanged at Rs 11800, they said.
Phutti prices in Sindh dropped sharply by Rs 500 to Rs 4000, in sympathy, rates in Punjab, shed Rs 100 to Rs 5200, they said. Approximately, 1,000 bales of cotton changed hands between Rs 11250-13700, dealers said. In fact, after the fall in the prices, the profit-takers were looking active to make better profit, dealers said.
But, the buyers were hoping that the rates will come down in the coming days, they said. The rates are still on decline in the international market and this factor is encouraging the buyers to adopt wait-and-see mood, they added.
On Wednesday the US cotton futures finished with hefty losses, but nowhere near the seven-cent downside limit reached in the prior two sessions as speculative spread selling seemed to have lost steam, brokers said.
Risk aversion that pressured cotton a day earlier also eased and speculators refocused on concerns over tight supplies, which had helped run fiber to records above $2 a lb. "Supply and demand seems to be trumping the fear factor," said Keith Brown of brokerage Keith Brown and Co in Moultrie, Georgia. March cotton finished down 1.38 cents, or 0.73 percent, at $1.8656 per lb, but fell as low as $1.8090.
March's open interest has ebbed to 1,100 contracts, with May futures carrying open interest of 18,096 lots. New benchmark May cotton on ICE Futures US settled with losses of 3.7 cents, or 1.97 percent, at $1.8423. The session low was $1.8093 a lb. March cotton fell even further, settling 4.61 percent, or 9.08 cent, lower at 1.8794 dollars per lb. The contract's delivery period began Tuesday, meaning that seven-cent trading limits do not apply. As a result, speculators sold March futures down near a two-week low of 1.7720 dollars in overnight trade, before buying it back at the close.
The following deals were reported: 600 bales of cotton from Mir Pur Khas at Rs 11250-11300 and 400 bales from Rahim Yar Khan at Rs 11700.
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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 23.02.2011
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37.324 Kgs 11,800 120 11,920 11,920 NIL
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Equivalent
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40 Kgs 12,646 120 12,766 12,766 NIL
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