Nominal activity was seen on the cotton market on Friday as leading buyers were on the sideline in the absence of fresh leads, dealers said. The Karachi Cotton Association (KCA) official spot rate was unchanged at Rs 5475, dealers said. In the ready business only 1000 bales of cotton changed hands as mills were buyer and seller, the deal was finalised at Rs 5500, they said.
Commenting on the recent improvement during the last sessions some analysts said that spinners' took interest in the buying to meet the export orders and mills were conspicuous due to their presence. The ginners' attitude in respect of prices has changed as they are trying to dispose off old stock ahead of new arrivals, which is expected in June, they said.
Surging global cotton consumption will push prices up 9.3 percent in 2010/11, but an international farm group said on Thursday "uncertainties" could prompt it to tamp down its forecast. The International Cotton Advisory Committee secretariat said in a monthly report that cotton prices could jump to 82 cents per lb in 2010/11, up from 75 cents a lb a year earlier.
Still, ICAC said high prices could be a factor in clamping down on cotton usage later in the year. On Thursday the New York cotton futures maintained strong gains into the close, boosted by mill buying and dollar weakness, but position squaring heading into the end of the quarter made for the biggest advance, traders said.
Benchmark May cotton contract settled 1.01 cent, or 1.27 percent, stronger at 80.55 cents a lb. It widened its range to the upside, reaching a high last seen on March 25 at 81.72. The session low was 79.50 cents a lb. Volume in the May contract was healthy at 15,931 lots by 3:35 pm EDT (1935 GMT). July cotton added 1.0 cent to finish at 81.82 cents. New-crop December ended 0.44 cent higher at 75.01.
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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 5,475.00 100 5,575.00
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Equivalent
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40 Kgs 5,868.00 100 5,968.00
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