Lint prices remain range-bound despite persistent demand on cotton market

Strong demand persisted on the cotton market on Thursday as prices were matching with the buyers' psychological levels, dealers said. The Karachi Cotton Association (KCA) official spot rate was unchanged at Rs 6000, they said. The seedcotton in Sindh picked up Rs 50 to Rs 2500-2600 and rates in Punjab were at Rs 2200-2800, they said.
Nearly 12,000 bales of cotton changed hands between Rs 5,700-6100 dealers added. According to the market sources as a result of panic selling by growers and ginners, prices came down and mills and spinners took interest in purchasing cotton of quality.
There are expectations for bumper cotton production this year, but bleak economic picture of the world, fading the hopes of better foreign exchange earnings, analysts said. In the meantime, many cautious mills and exporters were trying to cover the forward buying because they feel, if demand from China and other importing countries increase, prices will start going up, some analysts said.
Besides, monsoon rains are continuing in both the Punjab and Sindh and may last nearly one or two weeks, they said. When the monsoon season ends, then we will get the definite extent of damaged to crop, currently it is pre-mature to assume about the damage to standing crop, they said.
On Wednesday cotton futures settled easier on technically motivated investor sales, but the market held above its lows for the week and analysts were uncertain about the next move in fiber contracts. The key December cotton contract on ICE Futures US fell 0.25 cent to close at $1.0499 per lb, moving from $1.0461 to $1.09. Total volume hit almost 14,800 lots, over five percent above the 30-day norm, Reuters data said.
The following deals were reported: 1200 bales of cotton from Shahdad Pur sol at Rs 5700-5800, 1000 bales of cotton from Tando Adam at Rs 5750-5800, 200 bales of cotton from Hala at Rs 5700, 600 bales of cotton from Sanghar at Rs 5700-5750, 200 bales of cotton from Mir Pur Khas at Rs 5800, 400 bales of cotton from Hyderabad at Rs 5800, 1000 bales of cotton from Burewala at Rs 5800-6100, 400 bales of cotton from Vehari at Rs 5800-6000, 600 bales of cotton from Pir Mahal at Rs 5800-6000, 200 bales of cotton from Chistian at Rs 5800, 200 bales of cotton from Tiba Sultan Pur at Rs 5800, 400 bales of cotton from Sahiwal at Rs 5800-5900, 200 bales of cotton from Kassowal at Rs 5900, 400 bales of cotton from Hasil Pur at Rs 5900-6000, 400 bales of cotton from Arifwala at Rs 5900-6000, 800 bales of cotton from Khanewal at Rs 5900-6000, 1000 bales of cotton from Chichawatni at Rs 5900-5975, 200 bales of cotton from Bahawal Pur at Rs 6000, 400 bales of cotton from Multan at Rs 6000-6050, 400 bales of cotton from Mongi Bangla at Rs 6000, 200 bales of cotton from Mian Chaunnun at Rs 6000, 400 bales of cotton from Gojra at Rs 6000, 200 bales of cotton from Okara at Rs 6000, 200 bales of cotton from Pul Baghar at Rs 6050, 200 bales of cotton from Shorr Kot at Rs 6050, 200 bales of cotton from Shah Jevana at Rs 6050 and 200 bales of cotton from Kabirwala at Rs 6100.

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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 24.08.2011

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37.324 Kgs        6,000       130        6,130        6,130             NIL

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Equivalent

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40 Kgs            6,430       130        6,560        6,560             NIL

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