Firmness prevailed on the local cotton market on Wednesday as prices in ready business and official spot rate went up ahead of Muharram holidays, dealers said. The Karachi Cotton Association (KCA) spot rate was raised by Rs 200 to 9,100. Seed cotton prices in Sindh and Punjab were unchanged at Rs 3,900-4,200, they said.
In ready business trading activity was nearly inert as nearly 16,000 bales of cotton changed hands between Rs 9000-9,500, they said. According to the market sources, mills and exporters made buying to cover the immediate needs, ahead of Muharram holidays, they said. In the meantime, prices in ready dealings resisted losses due to higher trend in the NY cotton futures and in China cotton rates, they added.
Besides, some buyers were on the sidelines partly because of downward trend in the NY cotton market, other brokers said. They also said the normal trading may start from the next week and rates may move both ways. India cotton export policy is a big factor as leading investors are still confused because India did not announce extension in export time, they said.
On Tuesday the US cotton futures soared to their 5.0 cent daily limit at Tuesday's open, playing catch-up to the overnight rally when it surged to levels unseen since November 10, as buyers continued betting that supplies would not be sufficient to meet demand in top consumer China, brokers said.
Technical buying took over when a large gap was left open on the cotton chart overnight, as buyers in China followed up the 4.0 cent daily limit rise in Monday's session. Benchmark March cotton prices on ICE Futures US rose the 5.00 cent daily limit to $1.4597 per lb, the highest level for a second position cotton contract since November 10. March futures later pulled off the high to trade at $1.4557, up 4.6 cents, or 3.26 percent.
Volume for the contract was healthy at 9,877 lots by 11:10 am EDT (1610 GMT) At Monday's close, total volume traded hit about 12,500 lots, about two-thirds below the 30-day average of 34,500 lots, Thomson Reuters preliminary data showed.
The following deals were reported: 1000 bales of cotton from Shahdad Pur sold at Rs 9000, 1000 bales of cotton from Sanghar 9000, 1400 bales of cotton from Hyderabad at Rs 9000, 600 bales of cotton from Nawabshah at Rs 9100/9200, 1000 bales of cotton from Khair Pur at Rs 9300/9350, 1000 bales of cotton from Upper Sindh at Rs 9500, 1000 bales of cotton from Bahawal Pur at Rs 9000/9200, 400 bales of cotton from Haroonabad at Rs 9000, 400 bales of cotton from Hasil Pur at Rs 9000, 200 bales of cotton from Ali Pur at Rs 9200, 400 bales of cotton from Jalal Pur at Rs 9200, 1000 bales of cotton from Shujabad at Rs 9200/9300, 400 bales of cotton from Kacha Khu at Rs 9200, 200 bales of cotton from Mian Chano at Rs 9200, 800 bales of cotton from Khan Pur at Rs 9200, 1200 bales of cotton from Ahmed Pur at Rs 9200/9300, 800 bales of cotton from Liaquat Pur at Rs 9200, 400 bales of cotton from Kabir wala at Rs 9300, 400 bales of cotton from Khanewal at Rs 9300, 200 bales of cotton from Gailiwal at Rs 9300, 800 bales of cotton from Rahim Yar Khan at Rs 9200/9500, 800 bales of cotton from Rajan Pur at Rs 9500, 800 bales of cotton from Fazil Pur at Rs 9500and 200 bales of cotton from Choti at Rs 9500.
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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 14.12.2010
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37.324 Kgs 9,100 120 9,220 9,020 +200
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Equivalent
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40 Kgs 9,752 120 9,872 9,658 +214
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