Exporters and mills' demand pushed cotton prices sharply higher on the cotton market on Saturday, dealers said. The official spot rate was maintained at overnight level at Rs 5,500, they said. Prices of seedcotton in Sindh were higher at Rs 1800-2350 and in the Punjab up at Rs 2200-2800, they said.
In ready dealings about 30,000 bales of cotton changed hands at Rs 4,900-5,850, they added. In the domestic market, the low type cotton rates are gaining ground as India bought nearly 80,000 bales of cotton and it is likely that China may take interest in the purchasing of fine type, which would most likely boost the prices in the near future, Naseem Usman said.
Market sources said that less cotton production for the coming year, propelled the buyers, particularly mills and exporters to continue cotton buying to meet the demand. After steep fall in the cotton prices, several cotton growers and farmers planning to shift their position from cotton to other commodities, such as corn and soyabean due to lucrative rates.
In fact, this is general opinion in market that the consumptions may increase from the current level this year because China is buying cotton to built its reserves position strong, besides, the US may grow short crop just to avert huge losses, all these factors are helping the rates to go up, Naseem Usman said.
American cotton farmers are wondering how long China will keep buying cotton to rebuild its state reserves, a program that has helped boost fiber prices in the international market, a US cotton industry official said. Gary Adams, vice president and chief economist of the US National Cotton Council, said at the annual Beltwide Cotton conference here that as of December 22, 2011, China has bought 8.3 million (480-lb) bales of cotton.
"The real unknown is how long that (buying) will last," he said. China is the world's top producer and consumer of cotton because of its booming apparel industry. According to Reuters, on Friday, the NY cotton futures closed the week strong, holding solid gains to the finish, despite selling in other commodities and tepid weekly export data, as a drought and a healthy US jobs report supported the longer-term view. Benchmark March cotton futures ended the week at their second highest level since November 17, rising 1.12 cents to settle at 95.86 cents a lb.
The following deals were reported: 600 bales of cotton from Kazi Ahmed sold at Rs 4900, 3000 bales of cotton from Khair Pur at Rs 5150/5300, 2000 bales of cotton from Upper Sindh at Rs 5350/5400, 1000 bales of cotton from Bakkhar at Rs 5000, 800 bales of cotton from Burewala at Rs 5350, 400 bales of cotton from Dunia Pur at Rs 5375, 1400 bales of cotton from Kabbir Wala at Rs 5500, 400 bales of cotton from Ahmed Pur at Rs 5500, 2000 bales of cotton from Fort Abbas at Rs 5500, 800 bales of cotton from Liaquat Pur at Rs 5550/5600, 600 bales of cotton from Shadan Lund at Rs 5600, 400 bales of cotton from Lodhran at Rs 5600, 1400 bales of cotton from Bahawal Pur at Rs 5600, 400 bales of cotton from Rahim Yar Khan at Rs 5600, 3000 bales of cotton from Dera Ghazi Khan at Rs 5650/5850, 400 bales of cotton from Rajan Pur at Rs 5650, 1000 bales of cotton from Sadiqabad at Rs 5700, 1000 bales of cotton from Mian Wali at Rs 5700, 400 bales of cotton from Shujabad at Rs 5700, 2000 bales of cotton from Khan Pur at Rs 5650/5700 and 00 bales from Mianwali at Rs 5800.
===========================================================================
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 06.01.2012
===========================================================================
37.324 Kgs 5,500 130 5,630 5,630 NIL
---------------------------------------------------------------------------
Equivalent
---------------------------------------------------------------------------
40 Kgs 5,894 130 6,024 6,024 NIL
===========================================================================