Subdued business on cotton market

Subdued business was seen on the cotton market on Friday as ginners did not show any interest in fresh deals at the present rates on expectations of further rise in prices, dealers said. The official spot rate was unmoved at Rs 6700, dealers said. In Sindh, seed cotton prices were at Rs 3200-3500, they said. In Punjab, phutti rates were at Rs 3300 and Rs 3800, as per 40 kg, they added. In the ready session, over 4,000 bales of cotton changed hands between Rs 6750 and Rs 6950, they said.
Market sources said that some leading ginners preferred to be sidelines, instead of making new deals as the mills and spinners were not ready to pay above their psychological levels.
Explaining the latest position in the market, cotton analyst Naseem Usman said that other leading factor is the cotton shortage the world over, which is causing increase in rates with the passage of time.
Besides, the spinners have purchased nearly 9.7 million bales of cotton from the domestic market, he said and adding that they booked import orders to meet their urgent requirements.
Reports showing that Indian cotton exporters have cancelled orders for around 25,000 bales and postponed shipments of about 200,000 bales by up to a month after a supply shortage pushed up local prices, industry officials said.
The move by the world's biggest cotton producer is likely to help rival suppliers like Brazil, the United States and some African countries boost exports, with some Indian textile mills even starting to import cheaper fibre from overseas.
Adds Reuter: ICE cotton futures pared gains from earlier in the session on Thursday after the US Department of Agriculture raised its projections slightly for global production for the 2016/17 crop year.
The March cotton contract on ICE Futures US rose for the second straight session and was up 0.40 cent, or 0.53 percent, at 75.65 cents per lb at 1737 GMT (12.37 EST).
It had earlier touched a session high of 76.13 cents a lb before the monthly World Agricultural Supply and Demand Estimates (WASDE) report was released.
The following deals reported: 1000 bales from Rohri at Rs 6750, 600 bales from Haroonabad at Rs 6800, 400 bales from Sadiqabad at Rs 6925, 800 bales from Rahim Yar Khan at Rs 6950, 600 bales from Tonsa Sharif 400 bales from Ghazi Ghat all finalised at the same levels, 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 1-1/16"

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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    Expenses    Ex-Karachi  Ex. KHI, As   Ex-Karachi

                                                  on 09-02-2017   in Rupees

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37.324 kg         6,700      135        6,835         6,835             NIL

Equivalent

40 kgs            7,180      145        7,325         7,325             NIL

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