Buying improves despite rising rates on cotton market

Speculative buying was seen on the local cotton market on Thursday as mills showed fresh interest in purchasing on perception of further rise in the prices, dealers said. The Karachi Cotton Association (KCA) official spot rate was raised by Rs 25 to Rs 4,625, dealers said.
In the ready business over 8000 bales of cotton changed hands between Rs 4450-4800. Phutti prices in both the Punjab and Sindh were same at Rs 2050-2350, they added. Market sources said that the ginners increased the asking prices as unsold stock was short of demand. In the meantime, despite the higher rates some of the mills struck deals to meet the urgent requirement, they said.
The country will need to import about 2.5 million bales in the last quarter of the financial year ie June 2010 to mop up demand, with most of the supplies expected to come from neighbouring India and also from Brazi. On the other hand it is most likely that the ginners may increase the rates due to short supply position, they added.
On Wednesday the NY cotton futures finished higher on follow-through trade and investor buying, but weak outside markets pruned the gains in fibre contracts by the end of business, analysts said. The key March cotton contract went up 0.56 cent to finish at 69.82 cents per lb, moving from 69.26 to 70.67 cents. Volume traded in the March contract hit 11,186 lots at 2:40 pm EST (1940 GMT).
The following deals were reported: 200 bales of cotton from Mirpurkhas sold at Rs 4450, 1025 bales from Tando Adam at Rs 4650, 3000 bales from upper Sindh at Rs 4700, 400 bales from upper Sindh at Rs 4800, 1300 bales from Khairpur at Rs 4650, 200 bales from Mailsi at Rs 4700 and 1000 bales from Khan Pur at Rs 4800.

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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     4,625.00      100                   4,725.00

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Equivalent

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40 Kgs         4,957.00      100                   5,057.00

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