Pre-budget session: ginners demand higher prices for fine quality cotton

In pre-budget session prices were firm on the cotton market on Thursday, mills showed interest in buying fine quality after the floods and drought news in the cotton growing areas, but on the other hand, the ginners preferred sidelines instead of selling at the lower rates, dealers said. The Karachi Cotton Association (KCA) official spot rate retained the overnight level 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 over 3,000 bales of cotton changed hands between Rs 8500-8700, they added. According to the market sources, the mills were keen to make deal of finest quality at their psychological level but the ginners did not oblige them and were on the sidelines.
Some experts said that cotton crop could may be damaged if key growing state of Texas did not receive rains within one week and same situation is in China, which is causing anxiety among the buyers. If the present condition lasts for some more days, could be harming, they said.
Besides, revival of business activity as a result of buying and selling of cotton yarn is an encouraging development among the spinners and other traders, they said. Commenting on the next budget, some analysts said that tax on the incomes of farmers and agriculturists is also a concern. In the meantime, some ginners managed to sell their stuff following the rising fears about the new sales taxes.
On Wednesday the US cotton futures finished at a fresh four-week high as a severe drought in the key growing state of Texas easily wiped out early losses from poor US economic data, brokers said. The benchmark December cotton futures on ICE Futures US went up 1.77 cents to finish at $1.3727 per lb, dealing from $1.3194 to $1.3848. It was the highest settlement for the third-position cotton contract since May 4. Spot July cotton climbed 2.30 cents to conclude at $1.6097 per lb. Total volume traded reached almost 26,000 lots, almost 50 percent above the 30-day norm, Thomson Reuters preliminary data showed.
The following deals were reported: 400 bales of cotton (mill to mill) sold at Rs 8700, 1200 bales of cotton (mill to mill) at the same rate, 800 bales form Rahim Yar Khan at Rs 8500, 200 bales from same station at the same rate, same figure from same station at Rs 8600 and 400 bales from Kabirwala at the same rate.

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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 01.06.2011

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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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