Mills and spinners kept to the sideline on the cotton market on Friday due to confusions over the announcements regarding tax measures for the textile sector, dealers said. Karachi Cotton Association (KCA) official spot rate was unchanged at Rs 12,500, they said.
In Sindh and Punjab phutti price of low type was lower by Rs 500 to Rs 4000 and superior type also shed Rs 200 to Rs 5000, they said. In ready business approximately 3000 bales of cotton changed hands between Rs 12000-13600, they added. It appeared that most of leading participants were conspicuous by their absence due to confusions over the new tax measures introduced in the textile sector, some experts said.
They said that despite the higher prices, textile sector exports rose by 21 percent to eight billion dollars during the eight months of current fiscal year. Prevailing confusions caused a halt in the business activity these days, in the meantime, several meetings held to solve the related issues, they added.
The Pakistan Cotton Ginners Association (PCGA) issued its fortnightly report about the phutti arrivals till March 15, at 11.5 million bales, showing a decline against the last year's figure at 12.68 million bales, some brokers said.
Besides, some analysts said that on the other hand, there are still a lot of uncertainties surrounding the Japan crisis. People are still cautious of the impact on the economic side. Both buyers and sellers were sidelined, and moving in an out of the market. In the meantime, it is expected that concerns about Japan may subside in the near future, they said.
On Thursday the US cotton futures finished up by their daily limit as commercial and trade buying lifted the market off the previous session's three-week low. With the weekend coming up, dealers said players would be keeping a wary eye on Japan's nuclear crisis. The key May cotton contract on ICE Futures US rose by the seven-cent limit to close at $1.9212 per lb, with the session low at $1.85. Open interest, an indicator of investment exposure, totalled 173,403 lots as of March 16, still near the lowest since late July 2010, data from ICE Futures US showed. Volume traded stood at 17,600 lots, over 50 percent below the 30-day norm, Thomson Reuters preliminary data showed.
The following deals were reported : some 800 bales of cotton from Saleh Pat sold at Rs 12500, 1600 bales from Dehrki at Rs 13600, 400 bales from Faqirwali at Rs 12000, 400 bales from Hasil Pur at Rs 12000 and same figure from Bahawal Pur at the same rate, 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"
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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 17.03.2011
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37.324 Kgs 12,500 120 12,620 12,620 NIL
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Equivalent
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40 Kgs 13,396 120 13,516 13,516 NIL
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