Trading activity came down on the cotton market on Tuesday as a result of price war between ginners and spinners, some brokers said. The Karachi Cotton Association (KCA) official spot rate was unchanged at Rs 8,500, they said. In Sindh and Punjab phutti price of low type was at Rs 2500 and that of superior type at Rs 3000, they said. In ready business, nearly 2,000 bales of cotton changed hands between Rs 7,500-8,500, they added.
Some brokers commenting on the present trend in the market said that the business as compared to the last session, was slow as mills and spinners were not ready to oblige the ginners knowing the fact about higher-than-expected production in cotton producing countries.
According to a report, Brazilian cotton exports are set to double to a record 900,000 tonnes from the coming harvest which begins in June, after last year's price surge led producers to increase their plantings over soybeans and corn. Brazilian cotton output usually oscillates between one and 1.5 million tonnes but is set to surge 70 percent from last year to two million tonnes, according to government estimates.
Besides, in Australia, cotton production is double this year, which will help availability of the cotton for importing countries, they said. Most likely prices may move within a certain level, they said. On Monday the US cotton futures settled higher on investor buying as talk that there will not be enough cotton to be delivered in the spot month stoked a strong advance, analysts said. It was noticed that the ginners have already earned profit, when prices touched the all-time high level at Rs 14000, in the meantime, fine quality is still fetching the highest market rate, they said.
Some analysts said that to make up the supply gap, the textile sector still needs one million bales of cotton. The key July cotton contract on ICE Futures US increased the six cent daily limit to end at $1.5115 per lb, with the session low at $1.4518.
The new-crop December cotton futures rose 4.42 cents or by 3.8 percent to finish at $1.2003 per lb after moving between $1.1479 and $1.214. Volume traded stood around 12,800 lots, over 50 percent below the 30-day norm, Thomson Reuters preliminary data showed. The following deals were reported: 300 bales of cotton from Ghotki sold at Rs 8100, 200 bales from Vehari at Rs 7500, 400 bales from Chichawatni at Rs 7,500 and 1000 bales of cotton from Khan Pur at Rs 8400-8500.
===========================================================================
The KCA Official Spot Rate for Local Dealings in Pak Rupees
---------------------------------------------------------------------------
FOR BASE GRADE 3 STAPLE LENGTH 1-1/32"
---------------------------------------------------------------------------
MICRONAIRE VALUE BETWEEN 3.8 TO 4.9 NCL
===========================================================================
Rate Ex-Gin Upcountry Spot Rate Spot Rate Difference
For Price Ex-Karachi Ex. KHI. As Ex-Karachi
on 16.05.2011
===========================================================================
37.324 Kgs 8,500 120 8,620 8,620 NIL
---------------------------------------------------------------------------
Equivalent
---------------------------------------------------------------------------
40 Kgs 9,109 120 9,229 9,229 NIL
===========================================================================
Comments
Comments are closed for this article.