Activity improved as mills, spinners stepped up buying on cotton market

Leading mills and spinners showed interest in fresh purchasing on the cotton market on Monday, dealers said. The Karachi Cotton Association (KCA) official spot rate inert at Rs 4,900, they said. Prices of seedcotton in Sindh were unchanged at Rs 1500-2200 and in the Punjab followed the same pattern, retaining overnight levels at Rs 1600-2300, they said.
In ready dealings approximately 14,000 bales of cotton changed hands at Rs 3500-5,000, they added. The mills and spinners are busy in routine buying to run their business, they sai. It looks that the mills are in strong position as cotton production is expected to rise by nearly 17.69 percent, which is an indication for further decline in the rates, analysts said.
On the other hand, the ginners are worried under the circumstances, as they are in loss due to falling profits, they said. The Karachi Cotton Association (KCA) expressed its deep concern over the Pakistan Cotton Ginners Association's (PCGA) plea to the government to help in minimise the falling prices. The KCA said that it is against the market mechanism, prices should be on the trend in the market.
Till now it appeared that the government is not coming forward to stabilise cotton prices, experts said and addrd that Chinese government is trying to bring firmness in the rates. News, coming up that as a result of fall in the prices, the government of China continues to buy cotton from the market and planting acreage shrinks so Chinese cotton mills may suffer from higher cotton prices next year. Reports also said that the adjustment of cotton import tariff for sliding-tariff quotas may also raise costs for mills which need the high-quality crop.
The following deals were reported: 200 bales of cotton from Mir Pur Khas sold at Rs 3500, 2000 bales from Khair Pur at Rs 4300/4350, 2000 bales from Upper Sindh at Rs 4650/4750, 400 bales from Jahania at Rs 4600, 2000 bales from Haroonabad at Rs 4650/4700, 1000 bales from Faqirwali at Rs 4650/4700, 400 bales from Sahiwal at Rs 4650, 1600 bales from Burewala at Rs 4650/4700, 600 bales from Shujaabad at Rs 4700, 200 bales from Chani Goth at Rs 4850, 200 bales from Kot Addu at Rs 4900, 1400 bales from Rahim Yar Khan at Rs 4900, 600 bales from Ali Pur at Rs 5000, 200 bales from Head Bakani at Rs 5000, 1000 bales from Sadiqabad at 4900 and 800 bales from Rajan Pur at Rs 4900/5000.

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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 17.12.2011

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37.324 Kgs       4,900       130       5,030        5,030               NIL

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Equivalent

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40 Kgs           5,251       130       5,381        5,381               NIL

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