Holiday mood prevailed in cotton market on Friday as leading buyers were out of the ring mainly because of Divali and ahead long week-end, dealers said. The official spot rate was unchanged for the third day at Rs 1920, without upcountry expenses.
Dullness prevailed in the cotton market as most of the market players were far from the market attending Juma-tul-vida prayers, dealers said, adding that a few were also busy in Divali celebrations.
Experts said that increase in cotton exports by 150 percent hit the value-added textile products, showing 11 percent fall in export proceeds just in a single month.
Ahead of the beginning of the quota-free regime, they said, value-added textile exporters were in confusion as to how they would tackle the emerging situation in free market when production cost of their productions remains higher than their competitors, mainly India and China.
Exporters feel that the government has not taken precautionary measures to cut the cost of business to face the free-market challenges.
In the meantime, to further gear up the procurement drive, the inter-ministerial cotton procurement committee has asked the Trading Corporation of Pakistan (TCP) to raise the limit of cotton buying from 3,000 to 6,000 bales from each ginning factory, dealers said.
Furthermore, they said, the body had taken this step to stabilise prices. Additionally, it seems that the government might continue intervention to ensure payment of better prices to cotton growers.
The cotton prices were not showing sharp fall due to strong presence of the TCP in the market, they added. It may be noted that cotton growers were not getting support price of Rs 925 for phutti.
Cotton prices resisted steep fall due to continued buying by TCP, but it seems that prices might not maintain steadier trend for the long term following the bullish outlook in global production.
The tug of war might start between the growers and ginners over the prices in the post-holiday sessions, dealers said.
New York cotton futures finished mixed as players braced for the release of a pair of key government reports and options expiration on Friday. December contract rose 0.23 cent to 43.88 cents a lb, ranging from 43.50 to 44.20 cents. March contract eased 0.04 cent to 42.98 cents a pound. The rest ranged from 0.27 cent softer to 0.10 cent firmer.
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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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37.32 Kgs 1920.00 50 1970.00
Equivalent-------------------------------------------------
40 Kgs 2058.00 50 2108.00
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