Spot rate, lint prices fall on cotton market on steady arrivals
Steady phutti arrivals pushed rates down on the cotton market on Tuesday and some ginners got panicked, started selling to save themselves from further losses, dealers said. The Karachi Cotton Association (KCA) official spot rate was downed by Rs 200 to Rs 6,000, they said.
Seedcotton rates in Sindh came down, losing Rs 100 to Rs 2700-2800, prices in Punjab also fell by Rs 200 to Rs 2400-2600, they said. In the ready business over 5000 bales of cotton changed hands between Rs 5800-6250, dealers added.
Naseem Usman said that if phutti arrivals maintained pace, prices may continue to decline in the coming days. He also said that NY cotton futures may touch the low level at 88 cents per lb if declining trend continue in the New York cotton market.
Other brokers said that the Pakistan Cotton Ginners Association (PCGA) are worried about the slide in the rates, seeking support by the Trading Corporation of Pakistan (TCP).
They said that wet cotton from Punjab is losing its value, Punjab received good rains and this is good for standing crop.
On Monday the US cotton futures finished at a 9-month low due to debt woes in the US and Europe as the historic rally in the market appears to be at an end, analysts said.
Cotton had posted its sixth straight weekly loss last week and the biggest single weekly decline since December 2008, as demand destruction from the market's run up to a record over $2 per lb hit fiber contracts.
"The macro picture is lousy and there is no way to get around that," said Sharon Johnson, senior cotton analyst at commodities brokerage Penson Futures in Atlanta, Georgia. The key December cotton futures on ICE Futures US plunged 2.62 cents to end at 96.46 cents per lb, dealing from 94.46 cents to $1.0073.
It was the lowest close for the second-position contract since early October 2010, Thomson Reuters data showed.
Business was brisk. Total market volumes hit around 24,500 lots at 2:51 pm EDT (1851 GMT), more than a quarter above the 30-day norm, Thomson Reuters preliminary data showed.
The following deals were reported: 2000 bales of cotton from Shahdad Pur sold at Rs 5900-6250, 800 bales of cotton from Sanghar at Rs 5900/6125, 400 bales from Hyderabad at Rs 5900-6100, 400 bales from Matiari at Rs 5900-6100, 400 bales from Mir Pur Khas at Rs 5900/6100, 400 bales from Sahiwal at Rs 5800/5900, 400 bales from Pak Pattan at Rs 5800-5900, 200 bales from Mailsi at Rs 5800-5900 and 400 bales from Chichawatni at Rs 5800-5900.
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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 18.07.2011
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37.324 Kgs 6,000 120 6,120 6,320 -200
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Equivalent
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40 Kgs 6,430 120 6,550 6,765 -215
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