Upward trend persisted on the cotton market on Thursday due to acute shortage of cotton, dealers said. The Karachi Cotton Association (KCA) official spot rate was extended, picking up further Rs 150 to Rs 6,850, they said. In the ready business nearly 17000 bales of cotton changed hands between Rs 6750-7000, they said.
Seed cotton prices in Sindh were unmoved at Rs 3050-3150 and in Punjab rates were at Rs 3000-3100, they added. Some brokers said that the market was in grip of uncertainty due to decrease in unsold stock and slow arrival of phutti. Other marketmen said that the trend in the market is bullish and shortage problem may cause further rise in the rates. Besides, soaring prices in the international market is another adding factor, which is causing jitters among the cotton traders, they added.
Additionally, according to another report, the strong fundamentals that have lifted cotton futures to a 15-year high could continue into the second quarter of 2011 as growers struggle to meet rising demand.
Even though soaring prices should encourage bigger crops next year, falling stocks in top consumer China, the ongoing impact of deadly floods in number four producer Pakistan and a rapidly recovering global textile industry should keep prices bubbling. There is also concern about the cotton harvest in number two producer India, where un-seasonal long monsoon rains have caused delays and the government has clamped down on exports.
On Wednesday the NY cotton futures closed lower on profit-taking after hitting a 15-year top in the previous session, and most players are uncertain if the market is really done with its rally.
ICE Futures US key December cotton contract fell 0.88 cent to finish at 93.62 cents per lb. On Tuesday the contract closed at 94.50 cents in the loftiest finish for the benchmark second position cotton contract since 1995, the only time cotton futures traded over the psychological $1 level. December traded between 93.51 and 95.79 cents. Total cotton volume traded was at 21,881 lots at 2:35 pm EDT (1835 GMT), 56.89 percent above the 30-day average at 13,947 lots, according to preliminary Thomson Reuters data.
The following deals were reported: 2000 bales of cotton from Tando Adam sold at Rs 6850-7000, 1800 bales from Shahdad Pur at Rs 6850/7000, 400 bales from Shah Pur Chakar at Rs 6900, 400 bales from Mattayari at Rs 6900, 1000 bales from Mir Pur Khas at Rs 6900/7000, 400 bales from Sultanabad at Rs 6900, 200 bales from Kot Ghulam Mohd at Rs 6900, 600 bales from Sanghar at Rs 6900-7000, 400 bales from Mehrab Pur at Rs 7000, 400 bales from Hingorja at Rs 7000, 200 bales from Khair Pur at Rs 7000, 200 bales from Salehpat at Rs 7000, 400 bales from Hyderabad at Rs 6900, 2000 bales from Burewala at Rs 6700-7000, 200 bales from Sahiwal at Rs 6750, 400 bales from Samandari at Rs 6750-6850, 200 bales from Vehari at Rs 6800, 1200 bales from Chichawatni at Rs 6800/6900, 400 bales from Ghaziabad at Rs 6800, 200 bales from Mian Channu at Rs 6800, 800 bales from Haroonabad at Rs 6850/6900, 200 bales from Pak Pattan at Rs 6850, 1000 bales from Khanewal at Rs 6900/7000, 200 bales from Renala Khurd at Rs 6900, 200 bales from Pul Baggar at Rs 6900, 600 bales from Bhawal Nagar at Rs 6800/7000, 200 bales from Rahim Yar Khan at Rs 7000 and 200 bales from Madershah at Rs 6900.
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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"
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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 15.09.2010
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37.324 Kgs 6,850 120 6,970 6,820 +150
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Equivalent
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40 Kgs 7,341 120 7,461 7,300 +161
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