Firmness prevailed on the local cotton market on Thursday as growers and ginners held the stock on expectations of further rise in the rates, dealers said. The Karachi Cotton Association (KCA) spot rate was left unchanged at Rs 8,300. In the meantime seeds cotton prices in Sindh and Punjab managed to gain Rs 100 to Rs 3,600-3,800, they said.
In ready business trading activity came down as nearly 22,000 bales changed hands at Rs 8,000-8500 because growers held back the unsold stock for better return, they added. Some analysts were of the view that rising trend in the New York market helped the rates to stabilise in the domestic market and for other reason they observed that the growers and ginners were not willing to sell the stock at the present level.
Other analysts said that despite the fall in the prices the sellers are dreaming for the highest rates as they have done during the last month. According to a report soaring cotton prices and higher wage deals in producer countries will challenge the ability of European retailers to push through costs to cash-strapped consumers in their home markets, potentially hurting margins. Cotton is at a record high and workers in countries such as Bangladesh and China, major suppliers to the West, won bumper wage increases after strikes and political pressure - a double hit for retailers reliant on price-conscious European shoppers.
On Wednesday the US cotton futures bounced to a firmer finish, as technically oversold conditions and prospects of greater Asian demand growth helped prices snap a two-week losing streak that shaved more than 26 percent from the market.
The benchmark March cotton contract on ICE Futures US climbed 4.80 cents, or 4.3 percent, to settle at $1.1659 per lb, near the upper end of its $1.1113 to $1.1771 session range.
The bounce made cotton the biggest gainer in the CRB Index on Wednesday. Volumes were relatively firm ahead of the US Thanksgiving Day holiday on Thursday. The total stood at 27,038 lots by 3:28 pm EST (2028 GMT), up more than 50 percent from year-ago levels, Thomson Reuters preliminary data showed.
The following deals were reported: 1600 bales of cotton from Shahdad Pur sold at Rs 8000-8200, 800 bales from Matiari at Rs 8000-8050, 1600 bales from Nawabshah at Rs 8200-8300, 1000 bales from Mir Pur Khas at Rs 8000-8200, 1000 bales from Khair Pur at Rs 8200, 3000 bales from Upper Sindh at Rs 8200-8500, 400 bales from Layia at Rs 8000-8100, 800 bales from Mian Channo at Rs 8000-8200, 200 bales from Dhanoot at Rs 8000, 200 bales from Shujabad at Rs 8100, 1400 bales from Ahmed Pur at Rs 8200-8500, 2000 bales from Jalal Pur at Rs 8200-8500, 1200 bales from Fazil Pur at Rs 8300-8500, 1600 bales from Rajan Pur at Rs 8300-8500, 2000 bales from Ali pur at Rs 8400-8500, 400 bales from Tonsa Sharif at Rs 8500, 400 bales from Shadan Lund at Rs 8500, 400 bales from Jam Pur at Rs 8500 and 1000 bales from Liaquat Pur at Rs 8500.
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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 24.11.2010
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37.324 Kgs 8,300 120 8,420 8,420 NIL
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Equivalent
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40 Kgs 8,895 120 9,015 9,015 NIL
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