Trading activity improved on the cotton market on Tuesday as prices of seedcotton showed increase despite the news that India is permitting exporters to export more cotton, dealers said. The Karachi Cotton Association (KCA) official spot rate was unmoved at Rs 8,600, they said.
In Sindh prices of new crop Phutti were higher at Rs 3800 and in Punjab rates were at Rs 3900-4000 and old crop phutti in Sindh and Punjab, the rates were of low type at Rs 2500 and that of superior type at Rs 3000, they said. In ready business approximately, 2,500 bales of cotton changed hands between Rs 8200-8750, they said. Market sources said that unforeseen apprehensions are keeping mills and spinners in grip of confusion regarding availability of cotton production in the coming days. Naseem Usman said that fresh rise in the NY cotton market could be a factor behind the mills active buying. According to a report, India has asked traders to apply for permission to export an additional one million bales of cotton that were allowed earlier this month, a government statement said on Monday. India is showing its interest in selling cotton against the agreed rates, marketmen said.
On Monday the US cotton futures settled higher, extending the market's advance as players fretted over the damage the severe drought will inflict on the top cotton growing area of the United States, analysts said. The spot July contract climbed on short-covering by players who needed to cover short positions given the thin supplies of deliverable cotton in the contract with first notice day for deliveries coming up this week.
The key December cotton contract on ICE Futures US rose 0.30 cent to finish at $1.2407 per lb, ranging from $1.2155 to $1.2666. On Thursday, the contract closed at $1.2018 in the lowest finish for the third position cotton contract in nearly three weeks. Spot July increased 3.55 cents to end at $1.4873. Total volume traded on Monday reached nearly 14,000 lots at 2:49 pm EDT (1849 GMT), nearly a third below the 30-day norm, Thomson Reuters preliminary data showed.
The following deals were reported: 200 bales of cotton from Faqeer Wali at Rs 8500, 200 bales of cotton from Lodhran at Rs 8200, 300 bales from Kabirwala at Rs 8400, 250 bales from Sadiqabad at Rs 8400, 300 bales from Burewala at Rs 8800, 1000 bales from Khan Pur at Rs 8750 and 200 bales from Ahmed Pur at Rs 8500. Nearly 100 bales of cotton of new crop from Haroonabad sold at Rs 8650 and same figure from Burewala at Rs 8700.
===========================================================================
The KCA Official Spot Rate for Local Dealings in Pak Rupees
---------------------------------------------------------------------------
FOR BASE GRADE 3 STAPLE LENGTH 1-1/32"
---------------------------------------------------------------------------
MICRONAIRE VALUE BETWEEN 3.8 TO 4.9 NCL
===========================================================================
Rate Ex-Gin Upcountry Spot Rate Spot Rate Difference
For Price Ex-Karachi Ex. KHI. As Ex-Karachi
on 20.06.2011
===========================================================================
37.324 Kgs 8,600 120 8,720 8,720 NIL
---------------------------------------------------------------------------
Equivalent
---------------------------------------------------------------------------
40 Kgs 9,217 120 9,337 9,337 NIL
===========================================================================