Buying by TCP and exporters stabilises cotton prices

Supportive buying by the Trading Corporation of Pakistan (TCP) and exporters helped the prices to hold on to their overnight levels on Wednesday, dealers said.
The official spot rate of grade 3 cotton was unchanged at Rs 1,925.
Several deals were reported from Sindh at Rs 1850 and from Punjab most of the deals were finalised between Rs 1975-2000.
According to market sources, the TCP is still in the market to minimise the adverse impact of rising production reports on prices.
Exporters and TCP were busy in purchasing cotton in a big way following the news that the government intended to export 0.1 million bales cotton in the coming days.
According to Pakistan Cotton Ginners Association (PCGA) report, cotton arrivals up to October 15 increased by 1,260,816 bales (53.58 percent) as compared to the arrivals for the same period last year.
The report also said that rains had hurt cotton production and quality slightly.
In the meantime, the growers were dumping their produce at rates below the official price of 925 per 40 kg. In fact, they are under pressure as expectations of any increase in lint prices are fading following the better-than-expected global production outlook, market pundits said.
If prices come down from the current levels, the ginners might prefer to sell their stock to exporters and spinners to fetch better earnings. Rising trend in the NY cotton futures were also giving a boost in stabilising the local cotton market, they added.NY cotton futures closed higher with spot December surging on merchant buying due to tight supplies ahead of the harvest, analysts said. December contract jumped 1.12 cents to 47.54 cents a lb, near the top of its 46 to 47.75 cents band. Increases in the back months were far more modest. March added 0.26 cent to 47 cents.

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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"

MICRONAIRE VALUE BETWEEN 3.8 TO 4.9 NCL

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Rate           Ex-Gin     Upcountry    Spot Rate Ex-Karachi

for            Price                        Sales Tax @ 15%

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37.32 Kgs      1925.00        50                    1975.00

Equivalent-------------------------------------------------

40 Kgs         2063.00        50                    2113.00

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