Downward trend persisted on the cotton market on Tuesday as selling triggered by ginners on reports of steady phutti arrivals despite the monsoon rains in the cotton belt, dealers said. The Karachi Cotton Association (KCA) official spot rate was further lowered by Rs 200 more to Rs 7,600, they said.
Seedcotton rates, in sympathy, came down by Rs 200 in Sindh at Rs 3100-3200, prices in Punjab fell by Rs 200-300 to Rs 2900-3100, they said. In ready business trading activity improved as nearly 3,100 bales of cotton changed hands at Rs 7600-7900, they added. The buyers were active in covering the immediate needs in expectations of rise in the export orders, they said. Market sources said that some panic selling was seen by the ginners following reports that production is good, even cotton was grown in Kasur for the first time.
In the meantime mills showed interest in fresh buying and finalising deals, which are matching with the psychological levels, they said. The factor, which came up is projections for higher crop this year and the other adding reason for decline in prices is fall in foreign countries, particularly from European Union, who are under pressure due to economic slowdown, some experts said.
Naseem Usman said that Indian exporters, who held cotton stock to sell at the higher prices, are now worried under the circumstance as it seems that their dream may not come to true. Now, it is before time to say about the direction of market, but it seems that price may come down further in the near future, he added.
Other brokers said that after the rains in some parts of the cotton growing areas, there were perceptions that rains could cause interruptions in the phutti arrivals from the growers as they would prefer to hold back the new stock for good profit. Prices may continue to fall as there were no reports of pest attack which is helping the buyers to adopt wait-and-see attitude, analysts said.
The following deals were reported: 200 bales of cotton from Tando Adam sold at Rs 7750, 200 bales from Golarchi at Rs 7800, 300 bales from Haroonabad at Rs 7800/7900, 200 bales from Khan Pur at Rs 7850, 300 bales from Sahiwal at Rs 7800/7850, 200 bales from Sahiwal at Rs 7600, 400 bales from Burewala at Rs 7600/7700, 600 bales from Shanewal sold at Rs 7800, 200 bales from Arifwala sold at Rs 7800, 100 bales from Chichawatni at Rs 7600, 100 bales from Pak Pattan at Rs 7600, 100 bales from Dipal Pur at Rs 7650 and 200 bales from Tatay Pur at Rs 7700.
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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 04.07.2011
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37.324 Kgs 7,600 120 7,720 7,920 - 200
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Equivalent
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40 Kgs 8,145 120 8,265 8,479 - 214
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