Sluggish business was observed in post-holiday session on the cotton market on Wednesday as leading buyers were on the sidelines to see latest developments, dealers said. The Karachi Cotton Association (KCA) official spot rate was unchanged at Rs 5,300, they said.
Prices of seedcotton in Sindh were at Rs 1800-2300 and in Punjab at Rs 2000-2500, they said. In ready dealings, over 2,000 bales of cotton changed hands at Rs 4,900-5,300, they added. Market sources said that the growers and ginners were worried about the future business due to downward trend in the prices the world over.
To avoid the possible loss, the growers and ginners called on the government to intervene in the market through TCP to stabilise prices, they said. Some analysts were of the view that prices may stabilise in the coming days as ginners and growers were not inclined to bring down the rate of fine type. Most of the deals were, however, based on quality as some of the leading mills and spinners were willing to pay more for a better quality lots, they added.
On the other hand, they were not willing to keep unsold stock with them because of rising speculations about further decline in the cotton prices, he said. According to a report, China National Cotton Reserves Corp said in a statement on Monday that China's capacity for state cotton purchases this year is 4.1 million tonnes, 55 percent of the estimated 2011 cotton output.
Selling cotton to the government has been farmers' top priority because processors have refrained from active buying while profit margins are so slim, according to the statement published on the State-owned Assets Supervision and Administration Commission of the State Council's web site.
Reuters added: on Monday the NY cotton futures settled marginally higher in thin trade as the market awaited Friday's release of a government crop report, analysts said. Key March cotton futures gained 0.38 cent to finish at 92.22 cents per lb, moving from 91.54 to 92.80 cents. That was not too far from the Friday band of 90.92 to 92.27 cents.
Volume traded on Monday stood at around 7,700 lots, nearly two-thirds below the 30-day average, according to ICE Futures data. On Tuesday, the NY cotton futures settled higher on thin investor short-covering as the market tested the upper end of its trading band while looking toward release of a government crop report on Friday, analysts said.
Key March cotton futures gained 1.59 cents, or 1.7 percent, to finish at 93.81 cents per lb, moving from 91.51 to 93.63 cents. Volume traded on Tuesday stood at around 11,300 lots, more than 50 percent under the 30-day average, according to ICE Futures data.
The following deals were reported: 1000 bales of cotton from Upper Sindh sold at Rs 5100-5200, 400 bales from Garh Marahraja at Rs 4900-5000, same figure from Sadiqabad at Rs 5300 and equal number from Rahim Yar Khan at the same figure, they said.
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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 03.12.2011
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37.324 Kgs 5,300 130 5,430 5,430 NIL
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Equivalent
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40 Kgs 5,680 130 5,810 5,810 NIL
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