No let-up in price rise, spot rate up by Rs 200 on cotton market
Persisting demand by mills amid tight supplies pushed the prices further higher on the cotton market on Friday, dealers said. The Karachi Cotton Association (KCA) official spot rate was maintained surge, raising by Rs 200 to Rs 6200, they said. In Sindh seedcotton prices were unchanged at Rs 2700-2800 and in Punjab, rates fell by Rs 100 to Rs 2800-3000, they said.
In the ready business above 9000 bales of cotton changed hands between Rs 6,200-6,700 in process of trading, they added. According to the market sources it looks that speculative elements are trying to bring the prices at an unrealistic level, which will make the buyers unable to purchase due to higher prices.
It's a fact that prices were on the downside during the last several months due to projection of bumper crop, so most of the time buyers kept on the sidelines to see further decline in the rates, they said. But, in fact, growers and farmers held the stock, which helped the prices, started rising from bottom side. The growers were in loss due to high cost of production and also because of lack of storage capacity, they added.
Besides, after continued fall in prices, it was speculated that the government may fix cotton support prices, which was an adding factor for the current rise in prices, they said. In the meantime, it is interesting to note that after hitting all-time high level at Rs 14,000 some months ago, now if prices continue to rise again, how much prices can go up because there are some problems on the textile export front due to fall in demand by the importing countries, they said.
According to a report the Chinese government will buy cotton from farmers without a limit on volume when it launches a new stockpile plan this year, an industry website said on Friday. The cotton stockpile policy is the first such mechanism aimed at stabilising production, the government said earlier this year.
The purchase will kick off on September 1, with the price set at 19,800 yuan ($3,075) per tonne, the China Cotton Textile Association said in a statement published on its website, citing the National Development and Reform Commission. On Thursday the NY cotton futures ended with moderate gains, despite slides across the rest of commodity spectrum, as gains in exports, US chain store sales, and a strong technical picture all added to the rise.
Benchmark December cotton futures on ICE Futures US closed 0.73 percent higher, at $1.0492 per lb, up 0.76 cent. While the contract fell briefly below the 20-day moving average to a two-day low at $1.0251, it ended near the high at $1.0568 per lb. Volume for the contract came to 8,070 lots.
The following deals were reported: 1200 bales from Shahdad Pur sold at Rs 6200, 1000 bales from Sanghar at Rs 6200, 600 bales from Tando Adam at Rs 6200, 600 bales from Mir Pur Khas at Rs 6200, 200 bales from Hyderabad at Rs 6200, 400 bales from Gojra at Rs 6450-6500, 200 bales from Multan at Rs 6450, 200 bales from Sillan Wali at Rs 6500, 200 bales from Pul Bagarh at Rs 6500, 800 bales of cotton from Khanewal at Rs 6500, 200 bales from Hasil Pur at Rs 6500, 200 bales from Gajjo Mandi at Rs 6500, 600 bales from Vehari at Rs 6500-6600, 200 bales from Bhawal Pur at Rs 6500, 200 bales from Haroonabad at Rs 6500, 600 bales of cotton from Garh Mharaja at Rs 6550-6600, 200 bales of cotton Chichawatni at Rs 6550, 200 bales from Okara at Rs 6575, 800 bales from Burewala at Rs 6600, 200 bales of cotton from Arifwala at Rs 6600, 200 bales from Bahawal Nagar at Rs 6600-6700 and 600 bales from Kabirwala at Rs 6600.
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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 05.08.2011
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37.324 Kgs 6,200 130 6,330 6,130 + 200
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Equivalent
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40 Kgs 6,645 130 6,775 6,560 + 215
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