Thin business on cotton market as spot rate, lint prices extend fall
Lack of buying interest among mills and spinners pushed the rates down further on the cotton market on Saturday, dealers said. The Karachi Cotton Association (KCA) official spot rate was declined further, by Rs 100 to Rs 4,900. Thus, spot rate lost Rs 400 during the week and if the government does not take interest in the matter, rate could go down further in the coming week, they said.
Prices of seedcotton in Sindh were unchanged at Rs 1500-2200 and in Punjab prices followed the same pattern, retaining overnight levels at Rs 1600-2300, they said. In ready dealings, approximately 8,000 bales of cotton changed hands at Rs 4200-4,900, they added.
As a result of steep fall in the cotton prices, it was bring speculated among the cotton circle that the government may buy one million bales of cotton through the Trading Corporation of Pakistan (TCP), they said. Commenting on the report, Naseem Usman said that the Pakistan Cotton Ginners Association (PCGA) chairman Ammanullah Qureshi was of the opinion that to help the growers and ginners, the government moved to share the burden. The growers and ginners facing financial loss due to higher cost of production, but under the circumstances, they are not able to get the desired return, Naseem added.
Reuters adds: On Friday the US cotton futures finished flat, after two straight days of price swings, as investors reacted to developments from outside markets amid weak fundamentals for the fibre.
Benchmark cotton for March delivery on ICE Futures US settled at 86.29 cents per lb, unchanged from Thursday. The contract had risen 1.3 percent in the previous session, after falling 2.5 percent on Wednesday - reaching the lowest traded levels since the middle of August 2010 on spot continuation charts.
The following deals were reported: 1000 bales of cotton from Khair Pur sold at Rs 4200/4400, 1000 bales of cotton from Upper Sindh at Rs 4800, 200 bales of cotton from Mian Chanoo at Rs 4500, 400 bales of cotton from Dunia Pur at Rs 4600/4900, 200 bales of cotton from Bahawal Pur at Rs 4600, 400 bales of cotton from Haroonabad at Rs 4650, 200 bales of cotton from Uch Sharif at Rs 4700, 1000 bales of cotton from Fort Abbas at Rs 4700, 200 bales of cotton from Layyah at Rs 4750, 200 bales of cotton from Mamo Kanjan at Rs 4800, 400 bales of cotton from Mongi Bangla at Rs 4800, 200 bales of cotton from Gojra at Rs 4800, 600 bales of cotton from Khanewal at Rs 4800, 200 bales of cotton from Dera Ghazi Khan at Rs 4900, 400 bales of cotton from Mian Wali at Rs 4900, 2600 bales of cotton from Rahim Yar Khan at Rs 4900.
===========================================================================
The KCA Official Spot Rate for Local Dealings in Pak Rupees
---------------------------------------------------------------------------
FOR BASE GRADE 3 STAPLE LENGTH 1-1/32"
---------------------------------------------------------------------------
MICRONAIRE VALUE BETWEEN 3.8 TO 4.9 NCL
===========================================================================
Rate Ex-Gin Upcountry Spot Rate Spot Rate Difference
For Price Ex-Karachi Ex. KHI. As Ex-Karachi
on 16.12.2011
===========================================================================
37.324 Kgs 4,900 130 5,030 5,130 -100
---------------------------------------------------------------------------
Equivalent
---------------------------------------------------------------------------
40 Kgs 5,251 130 5,381 5,488 -108
===========================================================================