Falling trend persisted on the cotton market on Thursday as spot rate was extended overnight fall and prices in ready on steady arrivals of phutti, dealers said. The Karachi Cotton Association (KCA) official spot was dropped by another Rs 100 to Rs 5,700, they said.
Seedcotton rates in Sindh and Punjab were almost unchanged at Rs 2600-2700 and Rs 2400-2600, respectively, they said. In the ready business about 9000 bales of cotton changed hands between Rs 5600-5800, dealers added.
Some brokers said that mills continued buying on the prevailing rates, as they were not expecting sharp fall in the prices in the coming days.
On the other hand, the ginners preferred to sell, instead of keeping owing to increase in phutti arrivals. In the meantime, it is most likely the growers may not take interest in selling at the lower rates, they added.
Besides, the Karachi Cotton Association's (KCA) Chairman Muhammad Atif Dada, brushing aside the need for government's intervention to support the market, said that cotton price will stabilise as the demand picks up in the next two months.
There is no need for anyone to panic. The crop is not yet out of the woods, he said. Commenting on the remark by the KCA chairman, other analysts said "we are happy for receiving good crop, but it is just staring of the new season, we have to keep patient and wait till completion of production target".
On Wednesday cotton futures settled fractionally on investor sales as the trade cautiously eyed attempts to resolve the debt crisis in the United States and Europe in the days ahead, analysts said.
The market is looking toward an EU summit on Thursday to ease the debt woes of Greece and is hopeful a compromise would avert a US debt default in August.
The key December cotton futures on ICE Futures US slipped 0.09 cent to conclude at $1.0075 per lb, trading from 97.82 cents to $1.0213.
The following deals were reported: 400 bales of cotton from Hyderabad sold at Rs 5600-5700, 2000 bales from Shahdad Pur at Rs 5600-5700, 1000 bales from Sanghar at Rs 5600-5750, 200 bales from Matiyari at Rs 5600, 200 bales from Tando Adam at Rs 5600, 200 bales from Arifwala at Rs 5800, 400 bales from Burewala at Rs 5750-5800, 400 bales from Gojra at Rs 5700, 200 bales from Gojra at Rs 5725, 800 bales from Sahiwal at Rs 5700-5800, 200 bales from Bahawal Nagar at Rs 5600, 400 bales from Pak Pattan at Rs 5675, 200 bales from Samandari at Rs 5750, 200 bales from Vehari at Rs 5700, 200 bales from Lodhran at Rs 5800, 600 bales from Shujabad at Rs 5700-5800 and 1000 bales from Khanewal at Rs 5700/5800.
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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 20.07.2011
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37.324 Kgs 5,700 120 5,820 9,920 -100
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Equivalent
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40 Kgs 6,109 120 6,229 6,336 -107
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