Prices went up on the cotton market on Saturday mainly because of surge in the NY cotton futures and along with other several factors, dealers said. The official spot rate was higher by Rs 50 to Rs 4,550, dealers said. Seed cotton prices in Sindh were higher by Rs 50 to Rs 2450 and Rs 2550 and in Punjab rates also picked up by Rs 200 to Rs 2000 and Rs 2550, they said.
In the ready business, around 7,000 bales of cotton changed hands between Rs 4650 and Rs 4800, they said. Commenting on the rise in the prices, some leading experts said that the devaluation of Chinese yuan forced some leading spinners to adopt cautious approach fearing that exports to China will be costlier.
But increase in the NY cotton futures and demand by some international exporters, besides rains in the cotton belt in the Punjab helped the rates to go up sharply. Additionally, cotton analyst, Naseem Usman said that seed cotton arrivals into ginneries slowed down as the first cotton picking in Sindh nearing an end which boosted lint prices stabilise. Furthermore, he observed that short supply, however, disappointed many spinners, who were replenishing their stock at the prevailing lower prices.
Reuters adds: ICE cotton hit its highest level in more than one month on Thursday in a follow-through rally off the prior session's explosive gains, which were prompted by a US government report forecasting a significantly smaller crop than many expected.
The December contract has now switched to a premium over the March contract, a market structure known as backwardation reflecting traders' concerns about nearby supply. December cotton on ICE Futures US settled up by 1.1 cents on Thursday, a 1.7 percent gain, at 65.79 cents per pound. It rose as high as 66.51 cents a pound, the highest level since July 10.
On Friday, ICE cotton rose for the third straight session after an unexpectedly bullish US government supply and demand report from earlier in the week, but encountered resistance at the prior session's high as physical market activity remained cool. December cotton on ICE Futures US settled up by 0.16 cent on Friday, a 0.2 percent gain, at 65.95 cents per pound. It traded within a range of 65.25 and 66.51 cents a pound. Total futures market volume fell by 31,750 to 20,826 lots. Data showed total open interest gained 765 to 185,597 contracts in the previous session.
The following deals reported: 600 bales of cotton from Sanghar at Rs 4650, 200 bales from More, same figure from New Saeedabad at the same rate, 1600 bales from Shahdadpur at Rs 465-4700, 1400 bales from Tando Adam at the same rate, same number from Mirpurkhas at the same rate, 400 bales from Khanewal at Rs 4700, 200 bales from Mian Chano done at the same rate and 400 bales from Burewala at Rs 4800, dealers said.
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The KCA Official Spot Rate for Local Dealings in Pakistan 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 13.08.2015
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37.324 Kgs 4,550 135 4,685 4,635 +50
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Equivalent
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40 Kgs 4,876 145 5,021 4,968 +53
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