KCA raises spot rates to dizzy height at Rs 11,800 on cotton market
Spot rate was sharply higher on the cotton market on Thursday as the NY cotton futures making new records due to speculative trade, dealers said. They said that synthetic values, derived from moves on the options market, showed May futures got as high at $2.0193 per lb, easing to about $2.00 by the close, suggesting prices will keep rising.
Karachi Cotton Association (KCA) official spot rate was raised sharply higher by Rs 300 to Rs 11,800, they said. Phutti prices in Sindh and Punjab were up by Rs 200 at Rs 4500-5900, they said. In the ready business, about 2500 bales of cotton changed hands between Rs 12,000-13,000, they added.
Commenting on the recent rise in the NY cotton market some analysts said that it was expected that prices would hit new record as demand is increasing by Chinese importers and Indian ban on export of cotton fuelling the present trend in the cotton rates.
India has started exports of cotton but in a limited way, now it is interesting thing to note that what is new in the NY cotton market after crossing the barriers, they said. Local buyers failed to chase the cotton rates and kept on the sidelines just to watch the latest developments in both the domestic and global markets, they said.
To meet the local cotton buyers' demand, President Asif Zardari urged the All Pakistan Textile Mills Association (APTMA) and the Pakistan Cotton Forum (PCF) to increase the cotton production to get rid of shortage problem and to achieve textile export target, which will help in increasing the country's foreign exchange earnings.
After the meeting with president, the high-ups of textile sector are hoping prices may come down in the coming days, some brokers said. On Tuesday the US cotton futures recouped all of its day's earlier losses to end with strong gains of more than 2 percent, as some speculators were thought to be grabbing fiber futures on dips in a market that remains exceptionally tight on supplies, brokers said. Benchmark March cotton contracts on ICE Futures US finished with 3.97-cent gains, a 2.13 percent increase, at $1.9002 cents a lb.
On Monday, cotton prices slid by almost the same amount as Tuesday's rise to levels just short of the all-time high. On Friday, spot fiber futures advanced to an historic record of $1.9455 per lb. On Wednesday the US cotton futures surged to their seven cent upside limit, setting an all-time high, early and stayed there until the close as mills rushed to fix prices on cotton bought on-call before the upcoming delivery date for March futures.
Because Monday is US President's Day, delivery notices for the March cotton contract will be issued on Friday afternoon for Tuesday delivery, forcing many mills who purchased cotton on call to fix prices by then, brokers said. Benchmark March cotton on ICE Futures US finished at $1.9702 cents a lb., up seven cents, or 3.68 percent. May, July and October contracts all also ended at their seven cent limits.
Synthetic values, derived from moves on the options market, showed May futures got as high at $2.0193 per lb, easing to about $2.00 by the close, suggesting prices will keep rising. Only four deals were reported as 1000 bales of cotton from Sarhari sold at Rs 12000 and 400 bales of cotton from Saleh Pat sold at Rs 12500,400 bales from Hasil Pur and 700 bales from Rajan Pur done at Rs 13,000.
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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 15.02.2011
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37.324 Kgs 11,800 120 11,920 11,620 +300
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Equivalent
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40 Kgs 12,646 120 12,766 12,445 +321
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