Lean business was seen on the cotton market on Saturday as mills kept to the sidelines in the absence of motivating factors, dealers. The Karachi Cotton Association (KCA) official spot rate was unchanged at Rs 8,500, they said. In Sindh and Punjab phutty price of low type was at Rs 2500 and that of superior type at Rs 3000, they said.
In ready business 1000 bales of cotton changed hands between Rs 8,000-8,500, they added. Some brokers said that major buyers did not take interest in fresh deals as a result of decline in the NY cotton futures during the week but at the weekend, but at the weekend market rebounded and hopefully, the prices likely to stabilise in the local market.
Experts said that fall in the rates of cotton to make imports more competitive, besides, after value addition, it will ensure normal profit margin. In the meantime, mills were worried over piling up unsold stock of cotton yarn which caused stuck-up of huge money.
On Friday, the US cotton futures finished higher on investor short-covering by players worried about a historic drought in the key growing state of Texas ahead of a holiday weekend, brokers said. The cotton market will be closed on Monday for US Memorial Day. Trading resumes on Tuesday. The benchmark December cotton futures on ICE Futures US went up 1.93 cents to finish at $1.295 per lb, dealing from $1.2741 to $1.30. On the week, the market is up 8.13 percent.
Spot July cotton added 1.64 cents to close at $1.5267. Total volume traded reached over 9,500 lots, about 50 percent below the 30-day norm, Thomson Reuters preliminary data showed. Volume stood at 19,974 lots as of May 26, versus the prior tally of 21,654 lots, ICE Futures US data showed. The following deals were reported: 800 bales of cotton from Khan Pur sold at Rs 8500 and 200 bales from Lodhran at Rs 8000.
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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 27.05.2011
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37.324 Kgs 8,500 120 8,620 8,620 NIL
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Equivalent
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40 Kgs 9,109 120 9,229 9,229 NIL
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