Cotton market: slow business on US imposing 10 percent tariff on Chinese imports

Selective buying was witnessed on the cotton market on Friday following the US President Donald Trump's announcement, in which he said that he will impose additional tariffs on Chinese imports, dealers said. The official spot rate was unchanged at Rs 8400, they added. In ready session, about 4000 bales of cotton changed hands between Rs 8400-8500, they said. Rates of seed cotton per 40kg in both Sindh and Punjab were at Rs 3500-3900, they said. In Balochistan, seed cotton prices were at Rs 3900-4000, they said.
In Sindh and Punjab, Binola prices per maund were at Rs 1500-1550, they said and adding that polyester fibre per kg rates were at Rs 197. Market sources said that most of the buyers were shy of making new deals after Trump's comments, in which he said he would impose an additional 10% tariff on $300 billion worth of Chinese imports starting from September 1, as talks aimed to ease tensions between the world's two largest economies continue.
Cotton analyst, Naseem Usman said that on the one hand, local traders were worried about the future business, and preferring to keep on the sidelines, on the other hand trading activity slowed down in the international market, as well. Besides, Indian cotton production for the 2019-20 season is seen at 29 million 480 lb bales, the US Department of Agriculture (USDA) attache in New Delhi said in a report on Wednesday, down 1% from earlier estimates.
The production decline is the result of reduced plantings in central Maharashtra, where farmers are shifting towards soyabeans as well as in Karnataka, where farmers are switching to pulses and corn, the attache said. Adds Reuters: ICE cotton futures fell nearly 2% on Thursday to touch its lowest in nearly two weeks after US President Donald Trump said he will impose additional tariffs on Chinese imports.
The most-active cotton contract on ICE Futures US, the second-month December contract, fell 1.13 cents, or 1.77%, to 62.71 cents per lb at 2:18 pm EDT (1818 GMT). The contract touched its lowest since July 19 at 62.50 cents a lb. Total futures market volume rose by 3,838 to 18,135 lots.
The following deals reported: 1200 bales of cotton from Shahdadpur at Rs 8400, 800 bales from Tando Adam at Rs 8400, 400 bales from Sanghar at Rs 8400, 200 bales from Sinjoro at Rs 8500, 200 bales from Kotri at Rs 8400, 100 bales from Burewala at Rs 8500, 400 bales from Hasilpur at Rs 8500, 100 bales from Taniawala at Rs 8500 and 400 bales from Vehari at Rs 8400/8475, 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 1-1/16"

                                    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 01.08.2019

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37.324 kg          8,400      160        8,560         8,560            NIL

Equivalent

40 kgs             9,002      171        9,173         9,173            NIL

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