No respite in falling trend in cotton prices, spot rate reduced to Rs 6,700

Prices extended overnight fall on cotton market on Thursday in process of rising trend in the phutti arrivals, dealers said. The Karachi Cotton Association (KCA) official spot rate was slashed by Rs 200 to Rs 6700, they said. Prices of seedcotton in Sindh were at Rs 2200-2600 and rates in Punjab unchanged at Rs 1800-2800, they said. In ready dealings nearly 10,000 bales of cotton changed hands between Rs 5,350-6,800, they added.
Brokers said that phutti arrivals accelerated, it is rising with the passage of time and this factor will push prices down. In the meantime, the mills and spinners were happy on expectations of good profits from exports, they added. According to a report India's cotton exports could rise by 17 percent, or 1.4 million tonnes according to an official forecast in the year to September 2012, spurred by a record harvest, a weaker domestic currency and a freer trade policy, the top exporter of the fibre said.
India contributes 22 percent of global output and is expected to have a bumper harvest of 6.14 million tonnes, pushing it into competition with suppliers from Latin America, Australia and Africa, that will squeeze world prices. On Wednesday the NY cotton futures ended lower on follow-through speculative liquidation as worries over global economic health continued to hound fibre contracts, brokers said. Cotton market players digested news the US Federal Reserve embraced further monetary easing by extending the average maturity of its security holdings.
Traders said the market barely reacted because the news hit only a few minutes before cotton trading ended at 2:30 pm EDT (1830 GMT). The key December cotton contract on ICE Futures US dropped 2.58 cents, or nearly 2.5 percent, to end at $1.0283 a lb, trading from $1.0275 to $1.0656. Total volume traded on Wednesday hit almost 14,500 lots, about a fifth above the 30-day norm, preliminary Thomson Reuters data showed.
The following deals were reported: 400 bales of cotton from Tando Adam at Rs 5350-5400, 600 bales from Hala at Rs 6000-6200, 400 bales from Shahdad Pur at Rs 5400, 200 bales from Nawabshah at Rs 6200, 600 bales from Kandayro at Rs 6300-6500, 600 bales of cotton from Saleh Pat at Rs 6500-6700, 1600 bales from Bahawal Pur at Rs 6500/6700, 600 bales of cotton from Khanewal at Rs 6600-6800, 400 bales from Tonsa Sharif at Rs 6800, 1400 bales of cotton from Rajan Pur at Rs 6500-6800, 200 bales from Pul Bagar at Rs 6700, 200 bales from Shujabad at Rs 6700, 200 bales from Layyah at Rs 6600, 200 bales from Noor Pur at Rs 6600, 200 bales from Gajjo Mandi at Rs 6500, 400 bales of cotton from Burewala at Rs 6500, 200 bales of cotton from Fort Abbas at Rs 6500, 400 bales of cotton from Burewala at Rs 6500, 600 bales of cotton from Bahawal Nagar sold at Rs 6000-6200, 400 bales of cotton from Sahiwal at Rs 6000, 200 bales of cotton from Chistian at Rs 6000, 200 bales from Kassowal at Rs 6000 and 200 bales from Chichawatni at Rs 6000.

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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 21.09.2011

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37.324 Kgs       6,700       130       6,830        7,030              -200

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Equivalent

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40 Kgs           7,180       130       7,310        7,525              -215

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