Trading activity slackens as mills kept to sidelines after sellers increased the prices, dealers said on Friday on the cotton market. The Karachi Cotton Association (KCA) official spot rate was raised by another Rs 200 to Rs 7000, they said.
The prices of seedcotton in Sindh were at Rs 2300-2800 and rates in Punjab at Rs 2200-3000, they said. In ready dealings nearly 3,000 bales of cotton changed hands between Rs 7000-7,200, they added. Market sources said that after heavy rains in the cotton belt, it was observed that prices are still on upward march and since the week began, cotton prices picked by over Rs 1000 from Rs 6000 to Rs 7200.
The growers were trying to hold cotton waiting for the expected rise in the rates after heavy losses of crop by rains and floods. In the meantime, the mills and spinners are trying to avoid panic buying, which caused heavy losses to them more or less one-year ago, dealers said.
Prices are on rise but it looks that if the mills and spinners do not show interest in buying at higher rates, prices may not climb so sharply, analysts said. On Thursday the NY cotton futures ended at a fresh two-month high on follow-through investor buying although profit-taking pruned the market's gains, analysts said.
The key December cotton contract on ICE Futures US rose 3.29 cents, or almost 3 percent, to end at $1.1363 per lb, trading from $1.1117 to $1.1547. It was the loftiest close for cotton since July 8. Volume on Thursday was almost 26,500 lots, the highest amount traded since July 15, ICE Futures US data showed. The total traded would be more than double the 30-day norm, preliminary Thomson Reuters data showed.
The following deals were reported: some 200 bales of cotton from Kotri sold at Rs 7150, 400 bales from Khanewal at Rs 7150, 200 bales from Multan at Rs 7150, 200 bales from Qadir Pur at Rs 7000, 200 bales from Gillawal at Rs 7000, 400 bales from Chichawatni at Rs 7000, 200 bales from Vehari at Rs 7000, 400 bales from Burewala at Rs 7000, 400 bales from Rajan Pur at Rs 7200 and 400 bales from Kabirwala at Rs 7100.
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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 08.09.2011
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37.324 Kgs 7,000 130 7,130 6,930 + 200
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Equivalent
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40 Kgs 7,502 130 7,632 7,418 + 214
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