Selective buying by mills and spinners was seen on the cotton market on Wednesday in the process of trading, dealers said. The official spot rate was stable to Rs 4,500, dealers said. Seed cotton prices in Sindh were at Rs 2300 and Rs 2400 and in Punjab rates were at Rs 1800 and Rs 2525, they said. In the ready business, around 10,000 bales of cotton changed hands between Rs 4500 and Rs 4825, they said.
According to the market sources, after the China's move the mills were not willing to make deal in a big way due to fears of future losses. Cotton analyst, Naseem Usman said that to compete the international market, the Aptma is demanding to devalue the local currency, otherwise, we may lose foreign markets. A huge quantity of yarn is also creating big concern for the cotton traders, other brokers said. Reports said that China's move to devalue its currency reflects a growing clamour within government circles for a weaker yuan to help struggling exporters, ensuring the central bank remains under pressure to drag it down further in the months ahead, sources said.
The yuan has fallen almost 4 percent in two days since the central bank announced the devaluation on Tuesday, but sources involved in the policy-making process said powerful voices inside the government were pushing for it to go still lower.
Reuters adds: ICE cotton futures fell on Tuesday as China's currency devaluation kindled concerns about demand, though physical buying and positioning ahead of Wednesday's US government supply and demand report limited losses. December cotton on ICE Futures US settled down by 0.14 cent on Tuesday, a 0.2 percent drop, at 61.82 cents per pound. It traded within a range of 61.57 cents and 62.30 cents a pound. A weekly US Department of Agriculture crop progress report released Monday after the market close showed that 57 percent of cotton bolls planted on US farms had set as of August 2, well below the prior year's level and the previous five-year average.
The following deals reported: 1800 bales from Sanghar at Rs 4500-4800, 800 bales from Kotri at Rs 4550, 400 bales from Hala at the same rate, 1200 bales from Tando Adam at Rs 4550-4600, 2000 bales from Shahdadpur, 1600 bales from Mirpur Khas at the same rate, 200 bales from Matiyar at Rs 4600, same number from More at the same rate, 600 bales from Khanewal at Rs 4750, 200 bales from Deepalpur at the same rate and 800 bales from Burewala at Rs 4800-4825, dealers said.
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The KCA Official Spot Rate for Local Dealings in Pakistan 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 11.08.2015
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37.324 Kgs 4,500 135 4,635 4,635 NIL
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Equivalent
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40 Kgs 4,823 145 4,968 4,968 NIL
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