Spot rate raised by Rs 50 on cotton market

Spot rate was raised up on cotton market on Saturday as ginners were not lowering the asking prices a decision to hold the unsold stock till the announcement of federal budget, experts said. The Karachi cotton Association (KCA) official spot rate was moved up by Rs 50 at Rs 3750, dealers said.
In the meantime, some ginners who have no holding capacity for a long time, were selling at the prevailing levels, they said. The ginners, who have capacity to hold the unsold stock have decided to evolve a strategy after the announcement of budget.
In fact, the dominating factor is buyers' attitude, because, both mills and spinners continuously making forward deals in anticipation of further rise in the prices or market perception that the crop may be not meet the target figure for the current season, they said.
Other main factor behind the price flare-up is higher trend in the oil prices, which forced all necessities of life to run behind it, so the cotton prices are following the same pattern, they said. Falling trend in the NY cotton market is not affecting the rates in the local market, which is no doubt, a surprise for the cotton circle, they said.
It is also an speculation in the market that the growers are likely to sow 10-15 percent less cotton due to shortage of supply of irrigation water and fear of mealy bug attack on the crop, they said. On Friday, cotton futures finished firmer on investment fund buying sparked by a rally in other commodity markets and fibre contracts may use follow-through interest to punch higher next week, brokers said.
The now benchmark December cotton contract shot up 1.94 cents to close at 74.95 cents per lb, ranging from 73 to 75.76 cents. The spot July contract gained 1.87 cents to end at 66.52 cents, trading from 64.56 to 67.39 cents. Volume in the December contract stood at 16,892 lots at 3:21 pm EDT (1921 GMT) while July volume was at 16,826 lots. A solo deal of 400 bales from Gilaywal at Rs 4000, 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"

 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     3,750.00        50                   3,800.00

Equivalent-------------------------------------------------

40 Kgs        3,019.00        50                   4,069.00

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