Official spot rate cut to Rs 5,200; lint prices ease on cotton market

After maintaining a stable trend for a long time, official spot rate was dropped modestly on the cotton market on Wednesday, dealers said. The Karachi Cotton Association (KCA) official spot rate was reduced by Rs 100 to Rs 5,200, they said.
Prices of seedcotton in Sdindh were down by Rs 200-100 to Rs 1500-2200 and in Punjab followed the same pattern, losing Rs 200-100 to Rs 1600-2400, they said. In ready dealings, approximately 22,000 bales of cotton changed hands at Rs 3,600-5,200, they added.
Market sources said that market participants were hoping for the intervention by the Trading Corporation of Pakistan (TCP) in the market to ensure firmness of the rates, but in spite of several appeals by ginners and growers, the TCP is on the sidelines. The official spot rate fell, giving indication of further decline in the rates in the near future, they said. Some analysts said that disruption in supply of gas and electricity is causing huge losses for the country as garment sector lost export orders of nearly 800 million dollars.
According to a report, China, the world's top cotton consumer, imported 378,200 tonnes of the fibre in November, a rise of 199.6 percent from a year earlier, according to customs data cited by an industry website (www.cncotton.com). The November figure brings the country's total imports in the first 11 months to 2.57 million tonnes, up 8.4 percent year on year, the data showed.
Reuters adds: On Tuesday the US cotton futures ended with small gains after falling for a second consecutive day to a 16-month low, where buyers found value, brokers said. The sell-off this week followed Friday's monthly supply/demand report from the US Department of Agriculture that portrayed a large reduction in demand, they added.
The selling "was still a hangover reaction from the USDA report last Friday, especially the huge cut in world consumption," said Mike Stevens, an independent cotton analyst in Mandeville, Louisiana. Benchmark March cotton futures rose 0.15 cent to finish at 87.31 cents, after falling earlier to a low at 86.63 which dates back to August 2010 on a continuation chart.
The following deals were reported: 600 bales of cotton from Mir Pur Khas sold at Rs 3600/3800, 400 bales of cotton from Shahdad Pur at Rs 4150, 2000 bales of cotton from Khair Pur at Rs 4500, 2000 bales of cotton from Upper Sindh at Rs 5050, 1000 bales of cotton from Faqir Wali at Rs 4800, 2000 bales of cotton from Haroonabad at Rs 4800/4900, 400 bales of cotton from Fort Abbas at Rs 4900, 400 bales of cotton from Bahawal Nagar at Rs 4850/4900, 400 bales of cotton from Chistian at Rs 4900, 400 bales of cotton from Bahawal Pur at Rs 4900, 400 bales of cotton from Hasil Pur at Rs 4900, 400 bales of cotton from Chichawatni at Rs 4900, 100 bales of cotton from Burewala at Rs 4900/5000, 800 bales of cotton from Arif Wala at Rs 4950, 200 bales of cotton from Layyah at Rs 5000, 200 bales of cotton from Multan at Rs 5000, 400 bales of cotton from Shujabad 5050/5100, 400 bales of cotton from Ahmed Pur at Rs 5050, 2000 bales of cotton from Khanewal at Rs 5050/5200, 400 bales of cotton from Rahim Yar Khan at Rs 5100, 200 bales of cotton from Yazman Mandi at Rs 5100, 400 bales of cotton from Bakkhar at Rs 5100, 800 bales of cotton from Chani Goth at Rs 5100/5200, 1000 bales of cotton from Sadiqabad at Rs 5100, 400 bales of cotton from Dera Ghazi Khan at Rs 5150, 600 bales of cotton from Fazil Pur at Rs 5150, 2000 bales of cotton from Rajan Pur at Rs 5100/5200, 400 bales of cotton from Mianwali at Rs 5150 and 800 bales of cotton from Ghazi Ghat at Rs 5200.

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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 13.12.2011

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37.324 Kgs         5,200      130        5,330         5,430           -100

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Equivalent

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40 Kgs             5,573      130        5,703         5,810           -107

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