Firmness prevailed on the cotton market on Tuesday as most of the buyers were sidelined due to tight supplies, dealers said. The Karachi Cotton Association (KCA) official spot rate was unchanged at Rs 5,550, dealers said. In the ready business, over 3000 bales of cotton changed hands between Rs 5500-5600 in slow trading. Phutti prices in both the Punjab and Sindh were at Rs 2100-2200, they added.
Some brokers said that this is a factor, that textile sector is facing shortage problem despite the good production during the current year. In the meantime, a few millers are afraid that they may lose foreign exchange if any importing country rejected the orders due to contamination, they added.
"Most parts of the world is living under the unforeseen uncertainties, so we are able to guess any major positive development in the near future", they said. The exports of cotton yarn is encouraging the textile business and it is hoped that the government may take measures to increase local cotton production in the coming days, they added.
On Monday the New York cotton futures finished higher on investor buying amid market talk that managed money accounts will likely increase their positions in the market in the second quarter of 2010, brokers said.
The key May cotton contract gained 0.78 cent to close at 82.28 cents a lb, trading from 81.55 to 82.72 cents. Volume in the May contract hit 7,817 lots at 2:42 pm EDT (1842 GMT). July cotton rose 0.78 cent as well to finish at 83.52 cents and new-crop December added 0.36 cent at 75.46 cents.
The following deals were reported: 1380 bales of cotton exporter to mill changed hands at Rs 5500, 100 bales (exporter to mill) at Rs 5600 and 1000 bales (mill to mill) at Rs 5575, they 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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37.324 Kgs 5,550.00 100 5,650.00
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Equivalent
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40 Kgs 5,948.00 100 6,048.00
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