Listless trading was seen on the cotton market on Friday as mills were sidelined mainly because of financial problem, brokers said. The official spot rate was unchanged at Rs 3,700; they added. According to the market sources leading mills were on the sidelines owing to payment problems. On the other hand some were expecting the ginners may lower the asking prices to clean the backlog, they said.
The local spinners were in grip of uncertainties due to weak economic fundamentals and hovering fears of decline in demand by the textile importing countries, mainly from the European states due to world recession, cotton analysts said.
Under the circumstances ihe question gaining importance as to how ginners are going to tackle the situation, because they were hoping better profit due to high cost, they added. After peaceful elections in India, it's national currency gained strength, which indicates that Pak textile items likely to attract the foreign buyers instead of Indian products, cotton analysts said.
Nearly one month ago, the Indian rupee was trading at Rs 50 versus dollar, presently, it is available about at Rs 47-48 in terms of the US currency, they said. On Thursday, the US cotton futures fell after forecasts for rain over the Texas growing area boosted harvest prospects for a crop whose prices hit seven-month highs lately on dry weather concerns. The key July cotton contract on ICE Futures US settled down 0.37 cent at 56.78 cents per lb, dealing from 57.32 to 56.10 cents.
Volume traded in the July contract was at 5,736 lots at 3:35 pm EDT (1935 GMT). The new-crop December cotton contract fell 0.32 cent to finish at 60.04 cents. Total volume traded in the cotton market on Wednesday reached 8,214 contracts, from the previous tally of 13,064 lots, exchange data showed. Not a single deal was reported on Friday, dealers 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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37.324 Kgs 3,700.00 100 3,800.00
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Equivalent
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40 Kgs 3,965.00 100 4,065.00
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