Firmness prevailed on the cotton market on Tuesday as several mills covered their short-term position despite the upward trend in the prices, dealers said. The Karachi Cotton Association (KCA) official spot rate's overnight losses were recovered after raising by Rs 100 to Rs 6,700, they said.
In the ready business more than 7000 bales of cotton changed hands between Rs 6300-7200, they said. Seed cotton prices in Sindh were higher at Rs 2500-2650 and in Punjab rates went up to Rs 3000-3300, they added. Market sources said conflicting reports about the damage to cotton crop propelling mills to keep buying despite the higher prices. After the floods in the most parts of cotton belt, it appeared that the country may not meet the target of 14 million bales due to good production during the current year, they said.
In the meantime, it is difficult to guess the extent of damages because floods still persist in the Punjab and Sindh, the situation may be clear after two or three weeks, some other experts said.
On Monday the NY cotton futures closed slightly easier on mild profit-taking after surging to a 3-1/2 month high last week, but analysts feel the market's rally is not done and a further advance is on the cards. ICE Futures US benchmark December cotton contract slipped 0.16 cent to finish at 84.02 cents per lb. On Friday, the contract ended at 84.18 cents in the highest close for the second position cotton contract since April 28, according to Thomson Reuters data.
December traded from 83.75 to 84.79 cents. It was an inside day since the range was within Friday's 83.23 to 85.71 cents band. Volume traded in the December contract hit 6,804 lots at 2:33 pm EDT (1833 GMT). Total volume traded at 2:34 pm was at 10,067 lots, down 52.31 percent versus the 30-day average of 15,333 lots, preliminary Thomson Reuters data showed.
The following deals were reported: 400 bales of cotton from Mirpurkhas sold at Rs 6300, 800 bales from Shahdadpur at Rs 6300-6400, 1000 bales from Tando Adam at Rs 6350-6400, 800 bales from Sanghar at Rs 6300-6350, 300 bales from Khipro at Rs 6300, 200 bales from Hyderabad at Rs 6300, 1200 bales from Burewala at Rs 7100-7200, 400 bales from Chichawatni at Rs 7150, 200 bales from Sahiwal at Rs 7150, 800 bales from Vehari at Rs 7000-7100, 200 bales from Gaggo Mandi at Rs 7150, 100 bales from Chistian at Rs 6900 and 300 bales from Pak Pattan at Rs 7000-7100.
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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"
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MICRONAIRE VALUE BETWEEN 3.8 TO 4.9 NCL
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Rate Ex-Gin Upcountry Spot Rate Spot Rate Difference
For Price Ex-Karachi Ex. KHI. As Ex-Karachi
on 13.08.2010
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37.324 Kgs 6,700 120 6,820 6,720 + 100
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Equivalent
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40 Kgs 7,180 120 7,300 7,193 + 103
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