Official spot rate drifted lower on the cotton market on Saturday amid modest trading activity, dealers said. The official spot rate was down by Rs 100 to Rs 5,350 dealers said. In the Punjab, prices of seed cotton were at Rs 2600 and Rs 3200, they said. In the ready business, nearly 10,000 bales of cotton changed hands between Rs 4275 and Rs 5500, they said.
Market sources said that prices tracked the international downward trend following the news that will start selling cotton in the coming months. In the meantime, cotton analyst, Naseem Usman said that prices may not come down sharply due to short crop with the ginners and delay in next production due to unfavourable weather in the cotton belt.
According to reports, China will start annual cotton sales, set to occur from May to August, in order to reduce its massive state reserves down to a "reasonable level", the country's state planner said on Friday. For this year, the reserve sales will begin on May 3 and continue until August 31, with total sales not exceeding 2 million tonnes, according to a joint statement by the National Development and Reform Commission (NDRC) and the finance ministry.
Reuters adds: Cotton futures fell on Friday, registering the biggest loss in nearly a month as index buying waned after sharp gains in recent days even as traders took stock of China's plans to auction its massive reserves of the natural fibre. The July cotton contract on ICE Futures US settled down 0.83 cent, or 1.36 percent, the biggest loss in nearly a month, at 60.02 cents per lb, after hitting as low as 59.12. However, the contract ended up 0.77 percent this week.
Total futures market volume fell by 1,326 to 53,511 lots. Data showed total open interest fell 2,725 to 206,021 contracts in the previous session. The following deals reported: 400 bales of cotton from Ghotki at Rs 5500, same figure from Mirpur Mathilo at the same rate, 500 bales from Pannu Akil at Rs 5175, 200 bales from Shahdadpur at Rs 4275, 400 bales from Sanghar at Rs 5300 and same figure from Chichawatni at Rs 4900, they 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 15-04-2016
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37.324 kg 5,350 135 5,485 5,585 -100
Equivalent
40 kgs 5,734 145 5,879 5,986 -107
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