A steadier trend was witnessed on the cotton market on Saturday amid restricted buying by spinners, dealers said. The official spot rate was unchanged at Rs 5,300, dealers said. In Sindh, seed cotton prices were at Rs 1500-2700, and in Punjab prices stayed put at Rs 1700 and Rs 2900, they said. In the ready business, around 2400 bales of cotton changed hands between Rs 5260 and Rs 5550, they said.
Some analysts said that trading activity improved slightly but volume of business remained restricted in line with the global trend. Cotton analyst, Naseem Usman said that fresh buying helped the rates to keep firm trend despite slow trading. He said that Pakistan Cotton Ginners Association (PCGA) in the Saturday's meeting proposed support price for the next year to benefit growers.
Low business in the world leading cotton market was a factor behind the lean trading activity in the local market. Other experts said that the issue of Regulatory Duty also a factor, which is creating uncertainties among the buyers because this factor is causing several damages to the local spinning industry.
Reuters adds: Cotton futures languished near 6-1/2 year lows for a third straight session on Friday and notched up their biggest weekly loss in nearly five months on a stronger dollar and overall bearish trend in commodities. Global cotton stocks are expected to decline for the second consecutive season in 2016/17, research firm Cotton Outlook said on Friday.
Cotton contracts for May settled down 0.23 cent, or 0.40 percent, at 57.53 cents per lb, after hitting 57.26 cents, registering the biggest weekly percentage loss since September last year. Underscoring the level of bearishness in the market, data on Friday showed that speculative investors increased their net short in natural fibre to their highest in just over a year as prices sank to their lowest since 2009. Total futures market volume fell by 3,288 to 16,465 lots. Data showed total open interest gained 1,451 to 194,758 contracts in the previous session. The following deals reported: 1300 bales of cotton from Haroonabad sold at Rs 5260, 200 bales from Mianwali at Rs 5450, 400 bales from Rahim Yar Khan at Rs 5500 and same figure from Alipur at Rs 5550, 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 26-02-2016
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37.324 kg 5,300 135 5,435 5,435 NIL
Equivalent
40 kgs 5,680 145 5,825 5,825 NIL
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