Firmness prevails in cotton market

Firmness prevailed in the cotton market on Saturday as the interested buyers lifted the best types on the asking prices, brokers said. The official spot rates were unchanged at Rs 2250, without upcountry expenses. They said that the cotton prices were trading within the band of Rs 2150-2350 and seed-cotton was trading at Rs 900-1075. Market sources said that in the Friday meeting, it has decided that the Trading Corporation of Pakistan (TCP) to issue tenders soon to sell its stock.
It came to notice that if locals are interested in the best type of cotton, they can fulfil their requirements, secondly if any country wants to import from us, they can, dealers said.
They also said that despite the Pakistan Cotton Ginners Association's opposition to the hedge trading system, other cotton related circles are willing to help in the implementation of the hedge trading system to meet the World Trade Organisation's (WTO) necessities.
The NY cotton futures ended lower speculative fund sales but the market was well above session lows due to solid trade and commercial buying, brokers said on Friday.
The New York Board of Trade's key May contract settled off 0.23 cent at 52.80 cents a lb after dealing from 50.55 to 53.35 cents. July slipped 0.16 cent to 54.32 cents. Losses in back months ranged from 0.24 to 0.50 cent.
Sharon Johnson, cotton expert for Frank Schneider and Co Inc in Atlanta, Georgia, said a paucity in support for cotton caused futures to sink after the market touched its highest level for the session.
"The selling was just overwhelming," she said, adding automatic sell orders were touched off on the way down, especially with funds selling the difference between the spot May contract and the second position July contract.
There was also robust support in the May contract near the trend line support at 50.50 cents, according to Johnson.
Following deal was reported: some 2000 bales of cotton from Dharki at Rs 2350.

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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      2250.00         50                   2300.00

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

40 Kgs         2411.00         50                   2461.00

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