Prices of seed cotton drifted lower on the cotton market on Wednesday after the Pakistan Cotton Ginners Association (PCGA) report, showing an increase of 20 percent in Phutti arrivals against the last year, dealers said. Official spot rate extended overnight gains, picking up more Rs 50 to Rs 5,350, they said.
In the ready business, over 2,000 bales of cotton changed hands between Rs 5200-5550, they said. In both Sindh and the Punjab prices of seedcotton depreciated by Rs 100 to Rs 2300-2400, they added. Market sources said that prices went up on improved quality of cotton during the last sessions but now it looks difficult in the coming days.
They said in the evening prices slipped as PCGA fortnightly report till September 30 released at 3.45 million bales, showing an increase of 20 percent against the last year. Commenting on the latest situation in the market, cotton analyst Naseem Usman said that rise in phutti arrivals figure may cause a slide in the rates.
Presently, the quality of cotton is good and if exporters showed increase in the fresh buying, the rates may start going up in near future, he said. Besides, cotton spot prices in India are likely to continue falling this week as supplies rise and they may slid further later in the month on lower buying by China that could also depress global prices.
China, the world's largest consumer and the biggest buyer of Indian fibre, is expected to cut imports by over 50 percent in the 2012/13 marketing year that began on October 1 as the Asian giant tries to trim bulging cotton stocks. According to the Reuters, cotton prices rose for a second day on Tuesday as the market consolidated within recent ranges and on a flurry of short-covering after selling pressure in the run-up to the quarter's end last week.
After hitting its high for the day at 71.92 cents, New York cotton for December delivery settled up 0.91 percent at 71.85 cents per lb on ICE Futures US March's premium to the nearby price has increased in recent weeks due to pressure on the benchmark contract. It was as high as 1 cent on Monday, its loftiest in almost two months, before narrowing slightly to 0.84 cent on Tuesday.
Open interest dropped by 904 lots on Monday, its first fall in almost two weeks, reflecting a brief spell of short covering. That took the total to 189,650 lots. The Thomson Reuters-Jefferies CRB index, a global benchmark for commodities, eked out a gain of 0.07 percent.
The following deals reported: 2600 bales of cotton from Shahdad Pur sold at Rs 5400-5450, 2000 bales from Sanghar at Rs 5375/5450, 2200 bales from Tando Adam at Rs 5450, 2000 bales from Mir Pur Khas at Rs 5375/5400, 2000 bales from Nawab Shah at Rs 5450, 600 bales from Hyderabad at Rs 5450, 600 bales from Sakrand at Rs 5450, 400 bales from Kazi Ahmed at Rs 5450, 1000 bales from Khair Pur at Rs 5550, 2000 bales from Upper Sindh at Rs 5500/5550, 1000 bales from Hasil Pur at Rs 5200-5400, 800 bales from Burewala 5200-5400, 200 bales from Rahim Yar Khan at Rs 5300, 800 bales from Vehari at Rs 5325-5400, 1200 bales from Khanewal at Rs 5300-5350, 200 bales from Pak Pattan at Rs 5350, 200 bales from Shor Kot at Rs 5350, 600 bales from Faqir Wali at Rs 5400, 400 bales from Mian Chano at Rs 5400, 600 bales from Fort Abbas at Rs 5400, 2200 bales from Haroonabad at Rs 5400-5500, 200 bales from Shehar Sultan at Rs 5465 and 2000 bales from Rajan Pur at Rs 5500, 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"
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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 02.10.2012
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37.324 Kgs 5,350 155 5,505 5,455 +50
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Equivalent
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40 Kgs 5,734 155 5,889 5,835 +54
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