Official spot rate was sharply down on the cotton market on Tuesday due to recent dullness after the introduction of tax measures, dealers said. Karachi Cotton Association (KCA) official spot rate was dropped sharply by Rs 500 to Rs 12,000, they said.
In Sindh and Punjab, phutti price of low type was at Rs 4000 and superior type also unchanged at Rs 5000, they said. In ready business nearly 1000 bales of cotton finalised at Rs 12000, they added. Commenting on the breaking the deadlock on the business side, experts said that trading activity may improve in the coming days as it looks that issues may settle down very soon.
They also said that as a result of several meetings between All Pakistan Textile Mills Association (APTMA) and FBR did efforts were made to thaw the ice, causing huge losses to the textile sector. Furthermore, they said that the ginners, who make any deal with the registered firm, they are not bound to pay taxes. More solutions are expected on Thursday regarding the tax measures on the textile sector, Naseem Usman said.
According to data from the US Agriculture Department, the US cotton plantings, harvested acreage, yields, and production from 1998 to 2010, Private analytical firm Informa Economics pegged all US cotton plantings in 2011 at 13.13 million acres, which would be the highest since 2006.
The USDA will release its annual potential plantings report on March 31. Cotton plantings in the US are expected to jump because of high market prices. US futures rose to a record high of $2.27 per lb last month and were still trading near $2 a lb on Tuesday.
On Monday the US cotton futures finished easier after late investor profit-taking in subdued dealings back pedalling from a one-week high reached earlier in the session. The key May cotton contract on ICE Futures US shed 0.16 cent to close at $1.9896 per lb, moving between a low of $1.9735 an $2.0488, last seen on March 14. The last two sessions, the contract had risen by the seven-cent daily limit. Open interest, an indicator of investment exposure in cotton, stood at 173,119 lots as of March 18, a level that is still near the lowest since late July 2010, data from ICE Futures US showed. Volume traded stood at 14,000 lots, over 55 percent below the 30-day norm, Thomson Reuters preliminary data showed.
The following deals wee reported: 200 bales from Burewala sold at Rs 12,000, 400 bales from Rahim Yar Khan, 200 bales from Haroonabad and same figure from Faqirwali, all deals finalised at Rs 12,000, dealers 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 21.03.2011
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37.324 Kgs 12,000 120 12,120 12,620 -500
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Equivalent
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40 Kgs 12,860 120 12,980 13,516 -536
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