Prices touched the all-time high level on the cotton market on Thursday as some needy mills try to cover the forward deals, dealers said. Karachi Cotton Association (KCA) official spot rate was unchanged at Rs 12000, they said. Phutti prices also hit the all-time high mark at Rs 4200-5400 in Sindh and in Punjab rates were at Rs 4200-6000, they said.
Some 2400 bales of cotton changed hands between Rs 11400-14000 (two-month credit) dealers added. As a result of high rates in the New York cotton market, the prices followed the same path in the domestic market and it is very much visible that rates may look ahead in the near future, analysts said. Early sowing area may be affected by the recent rains in cotton belt, it is also a factor causing jitters among the buyers, they said.
In the meantime, the Pakistan Cotton Ginners Association (PCGA) issued its fortnightly report till February 28, the phutti arrival figure was nearly 11.5 million bales against the last year figure of 12.6 million bales. That shows a significant fall in the arrival of phutti, they noted. The number of unsold bales is decreasing with the passage of time despite the fact that the ginners were not willing to sell them at the present level in anticipation of fresh rise in the prices. Now the unsold stock is 0.4 million bales of cotton, they said.
On Wednesday the US cotton futures ended up the daily limit on suspected speculative buying, but the trading volume was slow to begin and the tone of business lacklustre, analysts said. Open interest in cotton futures stayed near a seven-month low as investors dumped cotton, although market fundamentals are seen by most players as still bullish, given tight supplies.
The key May cotton contract on ICE Futures US rose the seven-cent limit to finish at $2.006 per lb, with the session low at $1.933. Last week, the contract hit a record top at $2.1176 per lb. Open interest in the market stood at 175,406 lots as of March 1, up marginally from the seven-month low at 174,074 lots as of February 28, data from ICE Futures US showed. Volume traded on Wednesday stood at about 18,300 lots, some 40 percent below the 30-day norm, Thomson Reuters preliminary data showed.
The following deals were reported: some 400 bales of cotton from Rohri sold at Rs 13000, same figure from Saleh pat at the same rate, same number from Garh Mahraja at Rs 11400, same figure from Mongi Bangla at Rs 11700, same number from Kabirwala at Rs 13500 (one-month credit) and same figure from Rajan pur at Rs 14000 for (two-month credit), they said.
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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 02.03.2011
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37.324 Kgs 12,000 120 12,120 12,120 NIL
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Equivalent
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40 Kgs 12,860 120 12,980 12,980 NIL
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