Cotton prices stabilise despite spot rate cut as ginners stop panic selling
Ginners' patience helped prices to resist sharp fall on the cotton market on Friday. In the meantime, trading activity came down due to mills and spinners' cautious attitude, dealers said. The Karachi Cotton Association (KCA) official spot rate was reduced further by Rs 300 to Rs 6,400, they said.
Prices of seedcotton in Sindh were at Rs 2000-2600 and in Punjab unchanged at Rs 1800-2800, they said. In ready dealings nearly 6,000 bales of cotton changed hands between Rs 6,000-6,500, they said. Some analysts were of the view that the ginners got panic and sold phutti even below the psychological levels due to increase in phutti arrivals at the ginneries.
It is good strategy to stop sharp decline in the rates but pace of phutti arrivals are on rise, it looks that the ginners may not continue it for a long time, they said. One thing which can push up the prices, is quality, which is showing an improvement and may help ginners in attaining the better rates, other brokers said. On Thursday the NY cotton futures finished at a 1-1/2 month low on investment fund liquidation sparked by worries over US economic growth and a slowdown as the manufacturing sector contracts in No 1 consumer China, brokers said. World stocks and commodities dove as weak data from China crystallised investor fears of a global recession. The key December cotton contract on ICE Futures US dropped 3.54 cents or 3.4 percent to end at 99.29 cents a lb, trading from 99.07 cents to $1.0283.
Total volume traded on Wednesday in the cotton market reached 15,954 lots, versus the previous session's count at 12,893 lots, ICE Futures US data showed. It was the first time since August 11 when the second position cotton contract closed under the psychological $1 per lb mark. Total volume traded on Thursday hit over 20,600 lots, almost three-fourths over the 30-day norm, preliminary Thomson Reuters data showed.
The following deals were reported: 200 bales of cotton from Kandiyaro sold at Rs 6200, 200 bales of cotton from Ghotki at Rs 6300, 600 bales of cotton from Khair Pur at Rs 6300, 600 bales of cotton from Rohri at Rs 6300, 200 bales of cotton from Yazman Mandi at Rs 6500, 200 bales of cotton from Kabir wala at Rs 6500, 200 bales of cotton from Khanewal at Rs 6400, 200 bales of cotton from Hasil Pur at Rs 6400, 1000 bales of cotton from Burewala at Rs 6000/6350, 200 bales of cotton from Machiwal at Rs 6300, 400 bales of cotton from Vehari at Rs 6300, 200 bales of cotton from Haroonabad at Rs 6300, 200 bales of cotton from Patoki at Rs 6300, 200 bales of cotton from Lodhran at Rs 6200, 200 bales of cotton Gharah Mor 6200, 200 bales of cotton Bakhar 6200, 200 bales of cotton from Silian Wali at Rs 6200, 200 bales of cotton from Bahawal Pur at Rs 6200, 400 bales of cotton from Mian Chanoo at Rs 6100-6500, 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 22.09.2011
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37.324 Kgs 6,400 130 6,530 6,830 - 300
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Equivalent
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40 Kgs 6,859 130 6,989 7,310 - 321
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