Spot rate reduced to Rs 11,500; in ready business prices ease on cotton market

Bearish sentiment was witnessed on the cotton market on Tuesday as mills were not ready to do any business following the slackened demand in the overseas market, dealers said. Karachi Cotton Association (KCA) official spot rate was lower by Rs 500 to Rs 11,500, they said.
In Sindh and Punjab phutti prices of low type was at Rs 3000 and superior type at Rs 4000, they said. In ready business nearly 1600 bales of cotton changed hands between Rs 10000-11000, they added. Some market sources said that the ginners were looking worried about the fall in the daily-intake and on the other mills were also disturbed due to decline in the cotton yarn demand and prices the world over.
Under the circumstances, it looks that the prices may come down in the coming days. Continued fall in the NY cotton futures, giving an impression that rates likely to show soft trend mainly because of slow trade, they said. On Monday the US cotton futures ended up for the first time in five trading sessions, influenced by strength in the grains markets and ongoing concerns about drier weather in the Southern part of the country.
Cotton's gains bucked the trend in the broader softs complex, which came under pressure from Standard & Poor's negative outlook on the United States' top-notch credit rating. The front-month May cotton contract on ICE Futures US firmed 0.93 cent to end at $1.9645 per lb. Most-active July closed up 0.76 cent at $1.7816 per lb, after dealing between $1.7316 and $1.7980. New-crop December cotton rose 1.45 cents to $1.3063.
Trading volumes picked up from last week. More than 31,800 lots were traded by the close, more than 20 percent above the 30-day norm, Thomson Reuters preliminary data showed. The following deals were reported: 400 bales of cotton from Tharu Shah sold at Rs 10500, 200 bales from Haroonabad at Rs 10000, 200 bales from Faisalabad at Rs 10300, 400 bales from Bhawal pur sold at Rs 10500 and 400 bales of cotton from Chichawatni at Re 11000-10700.

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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 18.04.2011

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37.324 Kgs      11,500       120      11,620       12,120              -500

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Equivalent

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40 Kgs          12,325       120      12,445       12,980              -535

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