Sluggish business was seen on the cotton market on Wednesday as ginners are still on the sidelines on expectations of recovery in the rates, dealers said. Karachi Cotton Association (KCA) official spot rate was unchanged Rs 10,500, they said.
In Sindh and Punjab phutti price of low type was at Rs 3000 and that of superior type at Rs 3500, they said. In ready business nearly 1300 bales of cotton changed hands between Rs 8,900-9,800, they added. Market sources said that slight improvement was witnessed as the ginners showed interest in the selling the low quality at their psychological level.
In fact, the ginners don't have enough stock to keep with them for long, they can sell them within one day at their own choice, they said adding so they are hoping for recovery in prices, they said. In the meantime, the mills did buying on anticipations that if prices do not come down in the international market, this purchasing will help them in meeting the urgent needs. On the other hand, some were expecting fall in the rates and India has indicated further exports in the coming days, they said.
On Tuesday the US cotton futures slid to their lowest levels in 2-1/2 months, closing at their downside limit with ample supplies for waning demand, and caution ahead of the US Federal Reserve's policy meeting. Analysts said many commodity investors were nervous and the sidelines ahead of Wednesday's Fed policy announcement. US Federal Reserve officials will continue their two-day policy meeting on Wednesday.
The market is weak and July futures just came off more than the others. It's mostly economic issues as people are skittish about the growth outlook and chatter about raising interest rates," said Bill Raffety, senior analyst for futures brokerage Penson Futures in New York.
Despite deliveries being under way for May cotton on ICE Futures US, fell a steep 6.24 cents to end at $1.8184. Most-active July futures slid 6.0 cents, the downside limit, to close at $1.6039 per lb., a 3.61 percent drop. New-crop December cotton lost 4.52 cents to settle at $1.2944 cents a lb., a 3.37 percent decline. The following deals were reported: 730 bales of cotton from Tando Allah Yar sold at Rs 8900, 200 bales from Mir Pur Khas at Rs 9000, 200 bales from Hasil Pur at Rs 9100 and 200 more bales from Jalalpur at Rs 9,800, they added.
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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 26.04.2011
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37.324 Kgs 10,500 120 10,620 10,620 NIL
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Equivalent
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40 Kgs 11,253 120 11,373 11,373 NIL
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