Prices may fall sharply on cotton market sans TCP intervention
Rates may decline sharply on the cotton market if the Trading Corporation of Pakistan (TCP) not intervenes in the market, dealers said on Tuesday. The Karachi Cotton Association (KCA) official spot rate was unchanged at Rs 5,300, they said. Prices of seedcotton in Sindh were almost unchanged at Rs 1700-2300 and in Punjab prices retained the overnight levels at Rs 1800-2500, they said.
In ready dealings approximately 24,000 bales of cotton changed hands at Rs 3,500-5,400, they added. Market sources said that under the circumstances when the prices and demand of cotton are coming down, the Pakistan Cotton Ginners' Association (PCGA) held several sessions of discussions to seek the Trading Corporation of Pakistan (TCP) intervention in the market to stabilise cotton prices in the coming days.
It was observed that the prices of low quality were on the downside, so attracted the buyers, particularly mills and spinners, experts said. Leading mills and spinners were not making big deals during the last sessions on expectations of further decline in prices, they said.
But, it's a fact that today exporters were conspicuous by their absence and many mills were also on the sidelines just to see prices at their psychological levels, they said. They also said that the prices showed easier trend partly because of sharp fall in the NY cotton futures.
Reuters adds: On Monday the NY cotton futures finished at a 16-month low on follow-through investor sales as recession fears from the euro zone debt crisis and a bearish crop report kept the market on the defensive, analysts said. Key March cotton futures slid 3.27 cents or 3.6 percent to close at 87.16 cents per lb, after dealing between 87.06 to 90.84 cents.
It was the lowest settlement for cotton's spot contract since late August 2010, which was when the market began a historic rally that lifted it to record levels above $2 a lb earlier in the year. Volume traded on Monday stood at around 16,800 lots, around a quarter under the 30-day average, Thomson Reuters data showed.
The following deals were reported: 800 bales of cotton from Sultanabad sold at Rs 3500, 600 bales of cotton from Sultanabad at Rs 3600, 400 bales of cotton from Hala at Rs 3600, 600 bales of cotton from Mir Pur Khas at Rs 3800, 400 bales of cotton from Nawabshah at Rs 4175, 800 bales of cotton from Dadu at Rs 4575/4600, 400 bales of cotton from Sawan Sharif 4800, 2000 bales of cotton from Upper Sindh at Rs 5150/5200, 1000 bales of cotton from Haroonabad at Rs 5000/5100, 400 bales of cotton from Fort Abbas at Rs 5100 , 200 bales of cotton from Qabola at Rs 5150, 1000 bales of cotton from Bahawal Pur at Rs 5150/5200, 1400 bales of cotton from Burewala at Rs 5175/5200, 800 bales of cotton from Vehari at Rs 5200, 1400 bales of cotton from Lodhran at Rs 5200/5350, 1400 bales of cotton from Khanewal at Rs 5250/5300, 800 bales of cotton from Shujabad at Rs 5250/5300, 400 bales of cotton from Jalal Pur at Rs 5300 , 1000 bales of cotton from Shah Jamal at Rs 5300, 400 bales of cotton from Liaquat Pur at Rs 5300, 800 bales of cotton from Dera Ghazi Khan at Rs 5300, 200 bales of cotton from Layyah at Rs 5300, 1200 bales of cotton from Mian Wali at Rs 5300/5400, 2000 bales of cotton from Rajan Pur at Rs 5300/5400, 1000 bales of cotton from Rahim Yar Khan at Rs 5325, 400 bales of cotton from Shehar Sultan at Rs 5350, 600 bales of cotton from Sadiqabad at Rs 5300 and 1000 bales of cotton from Ahmed Pur at Rs 5200.
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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 12.12.2011
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37.324 Kgs 5,300 130 5,430 5,430 NIL
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Equivalent
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40 Kgs 5,680 130 5,810 5,810 NIL
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