Cotton spot rate, prices in ready business move up sharply on rising demand
Upward trend persisted on the cotton market on Thursday as mills got panic after news that cotton support prices may be fixed if rates go down further, dealers said. The Karachi Cotton Association (KCA) official spot rate was given rise by Rs 400 to Rs 6000, they said.
In Sindh, seecotton prices picked up by Rs 200 and to Rs 2700-2800 and in Punjab rates rose by Rs 200-300 to 2900-3100, they said. In the ready business improved buying by mills and exporters raised the volume of business. Over 14000 bales of cotton changed hands between Rs 5,700-6,400 dealers added.
Commenting on the present trend in the market some analysts said that trading activity picked up as mills and spinners keep buying after the news of cotton support price to help the growers and farmers. Other brokers said that if concerned authority of cotton, keep check and balance over the prices, the rates may maintain upward trend in the near future.
Volume of business was showing a rise during the last several sessions because the mills are not waiting for further decline in the rates of cotton in the near future, some experts said. Gap between demand and supply of phutt also caused a rise in demand and also increase in prices, as well, they said. Additionally, representatives of Trading Corporation of Pakistan (TCP), president of Sindh Chamber of Agriculture, Sindh Abadgar Board, president of Pakistan Cotton Ginners Association, the cotton commission Sindh, the Chief Agriculture P&D department government of Sindh and Director General Agriculture Research Sindh held a meeting today, in which they suggested the government to fix the prices of 40 kg of phutti at Rs 3,600.
The cotton growers and farmers are worried about the falling trend in the prices because they are in loss due to high cost of production after the recent sharp decline in the prices, analysts said. On Wednesday the US cotton futures finished with steep losses, though managed to remain above the 20-day moving average, as some investors sold the fiber to take profits following an advance that analysts said was likely won too quickly.
Key December cotton futures on ICE Futures US was down sharply at the end, falling 2.52 percent, to $1.0416 per lb. Setting an inside day on technical chart, a lower high and a higher low, which meant it failed to return to the near three-week peak set a day earlier. Volume in the benchmark contract was a moderate 7,460 lots, almost half the 13,679 lots traded as December cotton rallied. Across the board, preliminary volume at 10,144 lots stood well below the 16,834 lots traded on Tuesday and 30.6 percent below the 30-day average, according to ICE Futures US data. Open interest in the cotton market increased to 144,447 lots as of August 2, exchange data showed.
The following deals were reported: 1400 bales of cotton from Shahdad Pur sold at Rs 5700-6000, 1200 bales from Sanghar Rs 5700-6000, 1200 bales of cotton from Tando Adam at Rs 5700-6000, 800 bales from Mir Pur Khas at Rs 5700-6000, 400 bales from Matiyari at Rs 5700-6000, 600 bales from Kotri at Rs 5700-6000, 400 bales from Hyderabad at Rs 5700-6000, 200 bales from Nooriabad at Rs 6000, 1000 bales from Burewala at Rs 5950-6000, 200 bales from Mamo Kanjan at Rs 5925, 400 bales from Jahanian at Rs 6000, 200 bales from Multan at Rs 6000, 200 bales from Layyah at Rs 6000, 200 bales from Pir Mahal at Rs 6000, 600 bales of cotton from Sahiwal at Rs 6000, 400 bales from Bahawal Pur at Rs 6000, 200 bales from Lodhran at Rs 6000, 400 bales from Bhawal Nagar at Rs 6000-6275, 200 bales from Okara at Rs 6075, 400 bales from Hasil Pur at Rs 6000, 200 bales from Depal Pur at Rs 6000, 600 bales from Chichawatni at Rs 6000-6250, 200 bales from Arifwala at Rs 6000, 400 bales from Pak pattan at Rs 6000-6200, 200 bales from Rajan Pur at Rs 6100, 200 bales from Kassowal at Rs 6200, 400 bales from Vehari at Rs 6200, 200 bales from Haroonabad at Rs 6200, 200 bales from Mian Chaunnu at Rs 6200, 200 bales from Khanewal at Rs 6400 and 400 bales from Kabirwala at Rs 6400, dealers said.
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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 03.08.2011
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37.324 Kgs 6,000 120 6,130 5,730 +400
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Equivalent
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40 Kgs 6,430 120 6,560 6,132 +428
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