Better-than-expected phutti arrivals may cause further fall in cotton prices

Better-than-expected phutti arrivals may cause further decline in cotton prices in the coming days, dealers said on the cotton market on Tuesday. The Karachi Cotton Association (KCA) official spot rate was unchanged at Rs 6,300, they said.
Prices of seedcotton in Sindh were unchanged at Rs 2300-2800 and rates in Punjab were at Rs 2400-3000, they said. In ready dealings approximately 20,000 bales of cotton changed hands between Rs 5000-6,500, they added. Commenting on the present trend in the market, Naseem Usman said that bearish trend prevailed on the cotton market after phutti arrivals, which were higher than the expectation.
The Pakistan Cotton Ginners Association (PCGA) issued its fortnightly report which puts at 4.7 million bales till October 15, 2011, he said. Other brokers said that it is expected that the production may increase in the coming days. They said "we cannot reject the idea about the fall in trading activity in the absence of mills and spinners' demand to see further fall and if the growers and ginners lower the asking prices in that case, business activity may continue, they said.
On Monday the NY cotton futures finished sharply lower on spread-inspired investor liquidation and the market could probe the lower end of its trading band in the days ahead, analysts said. The key December cotton contract on ICE Futures US lost 1.58 cents to end at $1.0036 per lb, trading from 99.89 cents to $1.0248. The market has traded in a range from 98 cents to $1.04 for more than three weeks. Total volume traded on Monday hit more than 17,800 lots, over a third above the 30-day norm, preliminary Thomson Reuters data showed.
The following deals were reported: 400 bales of cotton from Sultanabad sold at Rs 5000, 200 bales of cotton from Khipro at Rs 5150, 600 bales of cotton from Mir Pur Khas at Rs 5200, 2000 bales of cotton from Khair Pur at Rs 6250/6300, 2000 bales of cotton from Upper Sindh at Rs 6250/6300, 600 bales of cotton from Gojra at Rs 6200/6300, 200 bales of cotton from Arif Wala at Rs 6200, 600 bales of cotton from Shujabad at Rs 6200, 1600 bales of cotton from Bahawal Pur at Rs 6200/6300, 200 bales of cotton from Kehroor Pacca at Rs 6200, 400 bales of cotton from Haroonabad at Rs 6200, 400 bales of cotton from Sahiwal at Rs 6200/6300, 400 bales of cotton from Hasil Pur at Rs 6200, 400 bales of cotton from Faqir Wali at Rs 6200, 200 bales of cotton from Lodhran at Rs 6300, 800 bales of cotton from Rahim Yar Khan at Rs 6300, 400 bales of cotton from Yazman Mandi at Rs 6300, 200 bales of cotton from Mian Chanon at Rs 6300, 1200 bales of cotton from Khanewal at Rs 6300/6325, 400 bales of cotton from Khan Pur at Rs 6350, 1000 bales of cotton from Burewala at Rs 6350/6400, 600 bales of cotton from Vehari at Rs 6300/6400, 400 bales of cotton from Layyah at Rs 6400, 3000 bales of cotton from Rajan Pur at Rs 6450/6500 and 1600 bales of cotton from Fazil Pur at Rs 6500.

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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 17.10.2011

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37.324 Kgs       6,300       130       6,430        6,430               NIL

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Equivalent

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40 Kgs           6,752       130       6,882        6,828               NIL

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