Spot rate continued its slide for the second on the cotton market on Thursday due to less interest among buyers, dealers said. The official spot rate shed more Rs 50 to Rs 5,300, they said. Prices of seedcotton in Sindh were at Rs 1800-2300 and in the Punjab rates were at Rs 2200-2650, they said. In ready dealings, nearly 6000 bales of cotton changed hands at Rs 5000-5700, they said.
Market sources said that both buyers and sellers were disturbed as buyers expect prices to decline further and on the other hand, the sellers kept on the sidelines to keep themselves away from the losses. Higher cost of production is encouraging them to make deal at loss, so, they preferred to wait for the proper time, they said.
Leading overseas buyers such as India and China were not active these days due to less demand by the importing countries, they said. According to a report, the area under cotton cultivation in India could fall up to 10 percent in 2012/13 season beginning in October, as lower returns from the fibre in 2011 may prompt farmers to switch to other crops, said the Cotton Association of India (CAI), a trade body. Furthermore, the central government will raise its purchase price for cotton this year by 3 percent, aiming to forestall a decline in domestic cotton acreage, the China Cotton Association.
According to the Reuters, on Wednesday, the NY cotton futures settled lower on investor liquidation after the market stalled in its advance while the firm dollar and weak outside markets undermined fiber contracts, analysts said. Benchmark May cotton on ICE Futures US dropped 1.80 cents or nearly 2 percent to finish at 90.44 cents per lb, trading from 89.88 to 92.30 cents. The market was well supported above last week's low near 89 cents.
Volume traded Tuesday was around 16,300 lots, preliminary Thomson Reuters data showed.
The following deals were reported: 200 bales of cotton from Mirpur Khas at Rs 3650, 400 bales of cotton from Ghotki at Rs 5100-5300, 600 bales of cotton from Khanewal at Rs 4900-5000, 400 bales of cotton from Chistian at Rs 5000, 400 bales of cotton from Haroonabad at Rs 5000, 600 bales of cotton from Jahania at Rs 5000-5100, 200 bales of cotton from Vehari at Rs 5200, 800 bales of cotton from Hasil Pur at Rs 5000-5200, 400 bales of cotton from Mailsi at Rs 5250, 400 bales of cotton from Fort Abbas at Rs 5250, 200 bales of cotton from Madrasa at Rs 5300, 200 bales of cotton from Lodhran at Rs 5300, 400 bales of cotton from Mian Wali at Rs 5600, 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 29.02.2012
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37.324 Kgs 5,350 130 5,430 5,480 -50
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Equivalent
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40 Kgs 5,680 130 5,810 5,864 -54
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