Genuine buyers keep away from market as New York cotton futures hit record high
Mills kept to the sidelined on the cotton market on Monday as NY cotton futures touched the all-time high level due to speculative buying, dealers said.
Resulting, the Karachi Cotton Association (KCA) spot rate was unchanged at Rs 10,100, they said. Phutti prices were not available as ginners were not buying the stuff from the growers, they said. In the meantime, a committee has been set up to analyse the situation to make an acceptable solution for the ginners, they said.
In ready business prices were stable as about 4,000 bales of cotton changed hands between Rs 10,100-10,500 (a deal was reported to have been done at Rs10,600,but could not be confirmed), they said.
Market sources said that persistent rise in the cotton prices refrained the mills to finalise any deal. The other major factor of sluggish business is lower yarn prices in the local market, while the yarn rates are picking in the international market, they said.
Now it looks that trading activity may increase in the near future, they said. On Monday, the US cotton rose to a record high, climbing by its daily limit for a second straight session following gains in China's cotton market, which rose on expectations of higher demand from the textile industry amid tight supplies.
The key March cotton contract on ICE Futures US rose 3.2 percent to $1.619 per lb. According to a report, most Zhengzhou cotton contracts traded up more than four percent early on Monday supported by expectation of a pick up in demand from the textile industry amid tight domestic cotton supply.
"Domestic cotton supplies have been very tight while there is expectation that sales of cloth in spring would pick up. Yarn prices have been rising every day, which pushed up cotton prices," said Yang Guoqi, an analyst with Jinshi Futures.
The most-active September contract was traded up more than five percent by 0200 GMT at 32,135 yuan ($4,881) per tonne.
Other report said that Australia, the world's third largest cotton exporter, could see production of the fibre hit record levels during the next three years, despite some crop loss due to floods in recent weeks, an industry executive said on Monday.
The following deals were reported: 200 bales of cotton from Mir Pur khas at Rs 10100, same figure from Kazi Ahmed at Rs 10200, 1000 bales from Upper Sindh at Rs 10500, 400 bales from Rahimyar khan at Rs 10200-10500, 200 bales from Bahawal Nagar at Rs 10200, 200 bales from Shadan Lund at Rs 10200, same figure from Gojra at Rs 10300, 400 bales from Chichawatni at Rs 10500 and 400 bales from Khanpur at Rs 10500.
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The KCA Official Spot Rate for Local Dealings in Pak 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 22.01.2011
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37.324 Kgs 10,100 120 10,220 10,220 NIL
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Equivalent
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40 Kgs 10,824 120 10,944 10,944 NIL
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