Rates came down on the cotton market on Saturday as mills kept on the sidelines to observe latest development after sharp fall in NY cotton futures and imposition of the withholding tax on the agriculture products, dealers said. The Karachi Cotton Association (KCA) spot rate was unchanged at Rs 9,900, they said.
Seed cotton prices in Sindh and Punjab were at Rs 3,900-4,700, they said. In ready business above 6000 bales of cotton changed hand between Rs 9,600-10200, they added. Market sources said that prices were soft following the declining trend in the NY cotton futures and withholding tax on the textile sector, so it is likely that trading activity may slow down due to said reason and China move, in which it raised banks' reserve requirements which could cool growth and hit cotton demand in the coming days.
Persistent rise in the prices encouraged the ginners to adopt inflexible attitudes towards prices as they were not lowering the asking prices, they said. On the other hand, the mills were not prepared to make any deal above their psychological levels because they hope rates will come down in the near future, they added.
On Friday the US cotton futures settled lower follow-through investor profit-taking and after No 1 consumer China raised banks' reserve requirements which could cool growth and hit cotton demand, analysts said. The cotton market will be shut on Monday to honour US civil rights leader Martin Luther King Jr. Trading reopens on Tuesday. The key March cotton contract on ICE Futures US dropped 2.62 cents to settle at $1.4144 per lb, dealing from $1.4119 to $1.4595. or the week, the market gained 0.5 percent however. Volume amounted to 20,700 lots, about 12 percent above the 30-day norm, Thomson Reuters preliminary data showed.
The following deals were reported: 2000 bales of cotton from Upper Sindh sold at Rs 10000-10200, 200 bales of cotton from Haroonabad at Rs 9600, 200 bales of cotton from Bakkhar at Rs 9700, 800 bales from Rahim Yar Khan at Rs 10000, 400 bales from Sadiqabad at Rs 10000, 400 bales from Hasil Pur at Rs 10000, 200 bales from Shadan Lund at Rs 10000, 400 bales from Tounsa Sharif at Rs 10000, 400 bales from Fazil Pur at Rs 10100, 400 bales gtom Ali Pur 10175, 200 bales from Shah Jamal at Rs 10200 and 400 bales from Mian Wali at Rs 10200.
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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 14.01.2011
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37.324 Kgs 9,900 120 10,020 10,020 NIL
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Equivalent
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40 Kgs 10,610 120 10,730 10,730 NIL
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