Modest trade was seen on the cotton market on Saturday during post-budget session, 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, prices showed modest rise as nearly 1000 bales changed hands between Rs 8500-8950, they added. According to the market sources ginners increased the asking prices of fine quality as they were expecting that prices would rise in the coming days.
Negative developments after drought in Texas and fears of delay in the rains in China caused slow but steady rise in the rates because the mills are needy and they have to buy to meet the exports requirements. On Friday the US cotton futures settled lower on investor profit-taking after surging to a month high due to the worst drought in a century in the big growing state of Texas, analysts said.
The benchmark December cotton futures on ICE Futures US fell 0.53 cent to end at $1.387 per lb, moving from $1.3725 to $1.409. On the week, the market is up 7.1 percent. On Thursday, the contract finished at $1.3923 per lb, the highest settlement for the third position cotton contract since May 3. Spot July cotton dropped 2.61 cents to conclude at $1.6163 per lb.
The National Drought Monitor said in a report on Thursday that more than half of Texas is experiencing "exceptional" drought. Open interest in the cotton market was at 160,725 lots as of June 2, its loftiest level since April 20, the exchange data showed, and a seeming indication of renewed investor interest in the cotton market.
Total volume traded on Friday reached almost 23,400 lots, more than 40 percent above the 30-day norm, Thomson Reuters preliminary data showed. The following deals were reported: 200 bales of cotton (mill to mill) sold at Rs 8950, 200 bales of cotton from Khanewal at Rs 8700, same figure from Faqeerwali at Rs 8500, same number from Kabir Wala at Rs 8800 and same number from Faisalabad 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 03.06.2011
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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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