The mills and spinners adopted wait-and-see attitude on the cotton market on Saturday to observe the latest developments as they have covered short-term requirements, dealers said. The Karachi Cotton Association (KCA) official spot rate was kept at the overnight level at Rs 8,500, they said.
In Sindh prices of new phutti were quoted at Rs 3550-3600 and old phutti crop in Sindh and Punjab, the rates of low type was at Rs 2500 and that of superior type at Rs 3000, they said. In ready business over 1600 bales of cotton changed hands between Rs 8200-8900, they added. Market sources said that the ginners indulged in panic selling at the ruling rates during the last two sessions following the news that India is ready to export one million bales of cotton more, so they have no option just to sell the old stock.
They said that rates of cotton is still attractive for the ginners and they are expecting prices could fall after the Indian news and phutti of new crop has started reaching the ginneries. Local cotton traders were keeping an eye on the freight rates in the overseas market, they will grab the foreign cotton if prices are acceptable for them. India may show some flexibility in selling the cotton mainly because of quality factor, they said.
Delay in rains is also one of the factor behind the thin business as the mills are waiting for decline in the present trend in the market, they said. Delay or short-fall of rains could improve standing cotton production, which may ease prices, they said.
On Friday the US cotton futures closed higher on follow-through investor buying as the searing drought in the top growing area of Texas trumped the weakness of outside markets, analysts said.
The key December cotton contract on ICE Futures US gained 0.66 cent to close at $1.3365 per lb, dealing from $1.308 to $1.3417. It was an inside day since the range was within Thursday's $1.3025 to $1.3455 band On the week, the third position cotton contract was down 3.64 percent. It was the first weekly loss for the contract in four weeks.
The spot July contract dropped 1.02 cents to settle at $1.5003 per lb. Total volume traded on Friday reached around 26,200 lots at 2:45 pm EDT (1845 GMT), some 50 percent above the 30-day norm, Thomson Reuters preliminary data showed. The following deals were reported: 400 bales of cotton from Lodhran sold at Rs 8200, 200 bales of cotton from Shujaabad at the same rate and 1000 bales from Khan pur at Rs 8900, they added.
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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 10.06.2011
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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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