Rising demand by mills, foreign buyers helps prices stabilise on cotton market

Strong demand by mills and foreign buyers aided the rates to stabilise on the cotton market on Saturday, dealers said. The Karachi Cotton Association (KCA) official spot rate was unchanged at Rs 5,300, they said. Prices of seedcotton in Sindh were unchanged at Rs 1800-2300 and in Punjab rates were at Rs 2000-2500, they said.
In ready dealings approximately 40,000 bales of cotton changed hands at Rs 3,800-5,400, they added. Brisk activity is an indication that the earning of textile exports may not come down sharply as this sector performed during the last several months, analysts said.
Contrary to this, it was highly expected by the cotton pundits that exports items may show better performance in the coming days as the cotton production is good and showing progress despite the heavy damages caused by monsoon rains and floods in the country, particularly in Sindh cotton belt, they added. Commenting on the significant rise in today's business volume against the last session, other experts were of the view that cotton traders were trying to cover the long-position at prevailing rates but most of them are trying to grab fine lots as much at lower rates.
Other experts were of the opinion that prices may not come further down, so making large buying, but at the same time a few of them still hope for more decline in the prices, on the other hand, the growers, who have spent more on the production were not getting the desired profits.
Who is the major gainer or loser, time will decide, right now, the government managers are busy in settlement of the chronic and new issues, which as a whole are very harmful for the nation and country, they said. On Friday the NY cotton futures lost nearly two percent of their value, hit by a bearish government crop report that pointed to a weakening trend in global fibre demand. The US Agriculture Department (USDA) forecast US 2011/12 cotton exports at 11.3 million (480-lb bales), unchanged from its November estimate.
US 2011/12 cotton production fell to 15.83 million bales compared with 16.3 million in its November supply data. Key March cotton futures tumbled 1.62 cents or 1.8 percent to finish at 90.43 cents per lb, after dealing between 90.15 and 92.75 cents.
The following deals were reported: 400 bales of cotton from Mir Pur Khas sold at Rs 3800, 1000 bales of cotton from Nawabshah at Rs 4260, 1000 bales of cotton from Khair Pur at Rs 4650/4700, 3000 bales of cotton from Upper Sindh at Rs 5150/5250, 2000 bales of cotton from Harisbabad at Rs 5000/5050, 1400 bales of cotton from Faqir Wali at Rs 5000/5050, 600 bales of cotton from Hasil Pur at Rs 5050/5075, 200 bales of cotton from Multan at Rs 5100, 400 bales of cotton from Vehari at Rs 5100, 600 bales of cotton from Burewala at Rs 5125/5200, 600 bales of cotton from Bahawal Nagar at Rs 5150, 1200 bales of cotton from Ahmed Pur at Rs 5150/5250, 400 bales of cotton from Gejjo Mandi at Rs 5200, 4000 bales of cotton from Khanewal at Rs 5200/5300, 2000 bales of cotton from Bahawal Pur at Rs 5200/5250, 400 bales of cotton from Jahanian at Rs 5200, 600 bales of cotton from Jalal Pur at Rs 5250, 600 bales of cotton from Khan Pur at Rs 5300, 400 bales of cotton from Dunia Pur at Rs 5300, 2500 bales of cotton from Sadiqabad at Rs 5300, 1200 bales of cotton from Kot Addu at Rs 5300, 400 bales of cotton from Shujabad at Rs 5300, 800 bales of cotton from Liaquat Pur at Rs 5300, 100 bales of cotton from Ali Pur at Rs 5300, 2600 bales of cotton from Rahim Yar Khan at Rs 5300-5350, 1600 bales of cotton from Layyah at Rs 5300, 600 bales of cotton from Shehar Sultan at Rs 5350, 2000 bales of cotton from Rajan Pur at Rs 5350/5400, 3200 bales of cotton from Mian Wali at Rs 5350/5400, 1000 bales of cotton from Dera Ghazi Khan at Rs 5400.

===========================================================================

The KCA Official Spot Rate for Local Dealings in Pak Rupees

---------------------------------------------------------------------------

FOR BASE GRADE 3 STAPLE LENGTH 1-1/32"

---------------------------------------------------------------------------

                                    MICRONAIRE VALUE BETWEEN 3.8 TO 4.9 NCL

===========================================================================

Rate              Ex-Gin   Upcountry   Spot Rate    Spot Rate    Difference

                    For      Price     Ex-Karachi  Ex. KHI. As   Ex-Karachi

                                                  on 09.12.2011

===========================================================================

37.324 Kgs         5,300      130        5,430         5,430            NIL

---------------------------------------------------------------------------

Equivalent

---------------------------------------------------------------------------

40 Kgs             5,680      130        5,810         5,810            NIL

===========================================================================