Improved business was seen on the cotton market on Wednesday as exporters entered the market to make deals, dealers said. The Karachi Cotton Association (KCA) official spot rate did not show further rise, holding the overnight level at Rs 7,250, they said. In the ready business approximately, 13000 bales of cotton changed between Rs 7050-7400, they said.
Seed cotton prices in Sindh fell by Rs 100 to Rs 3100-3200 and in Punjab rates followed the same pattern, losing 100-150 at Rs 3000-3050, they said. Some brokers said that prices may hold the present levels or go up if the exporters increase buying. It is a fact that bullish sentiment on the NY cotton market and falling supply in the local market causing higher trend in the prices.
Local exporters are keen to extend buying of cotton but they are not satisfied with concessions and facilities provided by the government, analysts said. In the meantime, they hope that the prices may stabilise after the news about the record production of cotton in India, they said.
In India a leading exporter said that cotton output in India, the world's second biggest producer, is likely to jump to a record 35 million bales in 2010/11, higher than earlier estimates of 32.5 million bales on better yields. Higher output could persuade the government to allow exports above 5.5 million bales with a tax, Kantilal Shah, chairman and managing director of Gill & Co Pvt Ltd, which has been in the business for over a century, told Reuters in an interview on Wednesday.
In the meantime, the rains are likely to increase risk of pest attack and disease to cotton, escalating cost of production. It will bring quality of crop and lower its value, said G.S. Butter, director, Cotton Research Centre of Punjab Agricultural University (PAU).
On Tuesday the NY cotton futures closed above $1 a lb for the first time in 15 years on fresh investment fund buying, tight supplies and strong demand in the market, analysts said. The key December cotton contract climbed 1.42 cents, up 1.43 percent on the day, to end at $1.0079/lb, the first time benchmark cotton closed over $1 since 1995. The contract traded as high as $1.0237, again the highest intra-day level in 15 years.
The following deals were reported: 600 bales of cotton from Mir Pur Khas sold at Rs 7400, 1000 bales from Mirpur Khas at Rs 7250, 400 bales from Sultanabad at Rs 7400, 2000 bales from Shahdad Pur at Rs 7300-7400, 800 bales from Tando Adam at Rs 7400, 200 bales from Jhole at Rs 7350, 1000 bales from Sanghar at Rs 7250, 200 bales from Mehrab Pur at Rs 7400, 1000 bales from Khair Pur at Rs 7350-7400, 200 bales from Hingorja at Rs 7400, 1400 bales from Burewala at Rs 7100-7250, 600 bales from Bakhar at Rs 7150-7200, 200 bales from Yazman Mandi at Rs 7200, 200 bales from Sahiwal at Rs 7200, 600 bales from Hasil Pur at Rs 7150-7200, 200 bales from Kassowal at Rs 7200, 1000 bales from Chichawatni at Rs 7100-7200, 200 bales from Daranwala at Rs 7200, 400 bales from Khanewal at Rs 7200 , 200 bales from Pak Pattan at Rs 7050, 200 bales from Vehari at Rs 7050, 200 bales from Garahwala at Rs 7050 and 400 bales from Pir Mahal 7050.
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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 21.09.2010
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37.324 Kgs 7,250 120 7,370 7,370 NIL
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Equivalent
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40 Kgs 7,770 120 7,890 7,890 NIL
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