Cotton market remains dormant, waiting for finance minister and stake-holders' meeting outcome
Listless business was seen on cotton market on Saturday as main buyers remained on the sideline, waiting for the outcome of the meeting of all stake-holders with the finance minister, dealers said. Karachi Cotton Association (KCA) official spot rate was unchanged at Rs 12,200, 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, not a single deal finalised due to buyers lack of interest, they added. Some experts also said that trading activity was low as main participants kept to the sideline most of the time to keep a watch on the developments on the global market.
The prices are so volatile due to speculative trade, they said. It appears that the NY cotton futures likely to touch the new high in the coming days, which propels the speculators towards the new selling, they said. Under the circumstances it was not easy to finalise the deals, because many market players are waiting for decision and also decline in the rates locally and globally, as well.
Commenting on the some activities during the last sessions, they attributed the fresh rise to forward sales by the leading buyers, including China. It appeared that if prices go up in the overseas market as a result of speculative sales, the market observed profit-taking the next session, a few analysts said.
On Friday the US cotton futures closed on investor profit-taking and players began looking toward release of a key government plantings report toward the end of next week, analysts said. The key May cotton contract on ICE Futures US dropped 4.33 cents to end at $2.0449 per lb, dealing from $2.0263 to $2.1116. On the week, the market is up 2.7 percent.
The market faltered when it tried to push its way beyond $2.10 and maybe $2.15, basis the key May contract, said Mike Stevens, an independent cotton analyst in Louisiana. Volume traded stood at about 16,000 lots, 40 percent below the 30-day norm, Thomson Reuters preliminary data showed.
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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 24.03.2011
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37.324 Kgs 12,200 120 12,320 12,320 NIL
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Equivalent
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40 Kgs 13,075 120 13,195 13,195 NIL
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