Improving demand for better quality lint helped cotton prices to maintain their present levels on Wednesday, brokers said. The official spot rate remained unchanged at Rs 2075, without upcountry expenses. The seed-cotton prices were mostly unchanged in Sindh at Rs 900-1050 and the same trend was seen in Punjab at Rs 900-1100. Cotton prices were at Rs 1900-2200 in Sindh and in Punjab at Rs 1950-2200, dealers said.
Commenting on the steadier trend in the cotton market, some analysts said that expectations of higher demand for quality cotton did not allow prices to move downwards.
Besides, the Chinese team is interested in the cotton buying but looking at its prices and quality, dealers said.
Prices also firmed on speculations that the Trading Corporation of Pakistan (TCP) may sign a deal with the Chinese delegation to export nearly 2.5 million bales of lint.
On the other hand, the local spinners were also facing the same situation, as they need to purchase better quality of cotton to meet their requirement, analysts said.
But, they were not lifting cotton at the prevailing prices on expectations of decline in the days to come, they observed.
In the meantime, they said, the mills may achieve the purpose by buy cotton from small growers, who have no space to store their stock for a long time.
The matters were getting interesting as on the one hand, cotton production figure is higher the world over, but prices of the best quality cotton are not showing any softness on the other which is an indication that prices may not come down in the near future, they said.
Explaining the low business, experts said that leading mills were on sidelines on the perception that after the release of the Pakistan Cotton Ginners Association (PCGA) fortnightly report about the figure of the phutti arrival prices would come down.
Analysts said that the cotton futures ended marginally higher on modest speculative buying and the market was seen drifting along due to the dearth of news to give it direction of its next move.
The New York Board of Trade's key March cotton contract climbed 0.12 cent to end at 43.88 cents a lb, ranging from 43.41 to 44.35 cents. May contract added 0.32 to 45.32 cents. The rest increased 0.05 to 0.40 cent.
The following deals were reported: 400 bales from Sanghar at Rs 2000, same figure from Sarhari at Rs 2065-2075, 1000 bales from Upper Sindh at Rs 2150, same number from Rahimyar Khan at Rs 2100-2150 and 200 bales from Muridwala at Rs 2125.
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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 2075.00 50 2125.00
Equivalent-------------------------------------------------
40 Kgs 2224.00 50 2274.00
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