Declining trend in the dollar's value dominated the cotton market on Tuesday as the prices came down sharply, dealers said. The official spot rate was unchanged at Rs 4200, they said. In the ready business, the phutti prices were down by Rs 25 to Rs 1900-1925 in Sindh and same trend mirrored in the Punjab, shedding Rs 100 to Rs 1700-2000, they said.
Market sources said that the cotton market was in grip of rising speculations that the prices may come down further on arrival of phutti and falling demand by the exporters after dollar's sharp decline versus the rupee. The surge in dollar's value was an attraction for exporters and it is likely that they (exporters) and mills may slow buying in anticipation of slide in the prices of cotton in the coming days, they said.
In the meantime, the position is just like dollar as currency speculators were selling the greenback amid rising fears about the fall in its value after the Musharraf's resignation market players said and added that similarly, the ginners were trying to attract buyers by lowering the asking prices.
On Monday the NY cotton futures edged up to a firm close on trade and investor buying as the market staged a modest recovery after sinking last week to an 11-month low, brokers said. The key December cotton contract added 0.19 cent to close at 67.37 cents per lb after trading from 67 to 68.42 cents.
On Friday, the contract ended at 67.08 cents. Based on the weekly charts of the contract, that was the lowest finish since the middle of August 2007. Volume traded in the December contract hit 8,173 lots at 2:36 pm EDT (1836 GMT).
The following deals were reported as some 2400 baes of cotton from Shahdadpur sold at Rs 4175-4250, 1200 bales from Tando Adam at Rs 4125-4225, 4100 bales from Sanghar at Rs 4100-4225, 800 bales from Khipro sold at Rs 4125-7175, 1000 bales from Mirpurkhas at Rs 4100-4200, 800 bales from Sultanabad sold at Rs 4100-4200, 600 bales from Hyderabad sold at Rs 4150-4200, 800 bales from Bhawalnagar sold at Rs 4150-4250, 1600 bales from Burewala sold at Rs 4150-4225, 600 bales from Chichawatni sold at Rs 4150-4200, 400 bales from Mian Channu at Rs 4150-4200, 200 bales from Khanpur at Rs 4200, 200 bales from Gajjo at Rs 4200, 200 bales from Mungi Bunglow sold and Rs 4175 and 200 bales from Haroonabad sold at Rs 4215, dealers said.
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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 4,200.00 50 4,300.00
Equivalent-------------------------------------------------
40 Kgs 4,501.00 50 4,601.00
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