Mills', exporters' forward buying keeps prices steady on cotton market
Mills and exporters indulged in forward buying amid rising fears of increase in prices, dealers said on the cotton market on Saturday. The Karachi Cotton Association (KCA) official spot rate was unchanged at Rs 5,500, they said. In both Sindh and Punjab seedcotton rates are moving between Rs 2300-2450, they said.
In the ready business trading activity was strong as nearly, 11,000 bales of cotton changed hands between Rs 5,300-5700 dealers added. Market sources said that prices halted erosion as a result of rising demand by mills and exporters. Naseem Usman said that phutti arrivals are good and may continue pace if weather is favourable, presently, the crop is free from pest attack.
If overseas importers take interest in buying, the textile sector to maintain the pace, other analysts said. The local cotton traders are confused about the uncertainties due to the US debt crisis, they said. The debt crisis surrounding the US, has worried cotton traders, who expect the worst for the commodity rates, particularly cotton traders, if the world largest economy receives any setback.
If the US demand for textile products fall, China, in turn could cut back the buying and this factor, could be disastrous for the cotton traders and country's economy, as well, they said. On Friday, cotton futures settled lower as the market swung from daily limit down to slightly firmer on the day in a reflection of the deep uncertainty gripping investors worried over the US debt crisis, analysts said.
The key December cotton futures on ICE Futures US fell 0.80 cent to finish at $1.0177 per lb, trading from 98.57 cents to $1.028. On the month, the market is down around 14 percent. But the market's weekly performance showed a three percent gain.
Since hitting a session low of 93.20 cents on Tuesday, cotton shot up by over 12 percent to hit a Wednesday peak at $1.0444, its highest since gapping lower on July 14 and July 15. Total market volume on Friday hit around 11,200 lots at 2:53 pm EDT (1753 GMT), about 30 percent below the 30-day norm, Thomson Reuters preliminary data showed.
The following deals were reported: 1000 bales of cotton from Shahdad Pur sold at Rs 5300-5500, 200 bales from Mir Pur Khas at Rs 5400, 200 bales from Golarchi at Rs 5300, 800 bales from Tando Adam at Rs 5300-5400, 1000 bales of cotton from Sanghar at Rs 5300, 200 bales of cotton from Matiari at Rs 5300, 200 bales from Renala Khurd at Rs 5300, 1000 bales from Chichawatni at Rs 5350-5500, 1200 bales from Hasil Pur at Rs 5400-5450, 200 bales from Jahanian at Rs 5400, 400 bales from Bahawal Pur at Rs 5400, 1000 bales from Burewala at Rs 5400-5700, 400 bales from Lodhran at Rs 5400-5580, 600 bales from Vehari at Rs 5400-5500, 600 bales from Bahawal Nagar at Rs 5400, 200 bales from Samandari at Rs 5400, 600 bales from Haroonabad at Rs 5500, 200 bales from Arifwala at Rs 5500, 200 bales from Tiba Sultan at Rs 5500 and 400 bales from Sahiwal at Rs 550.
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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 29.07.2011
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37.324 Kgs 5,500 120 5,620 5,620 NIL
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Equivalent
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40 Kgs 5,894 120 6,014 6,014 NIL
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