Forward buying by mills pushed prices slightly up on the cotton market on Wednesday and it is expected that prices may not depict sharp changes in the near future, dealers said. The Karachi Cotton Association (KCA) official spot rate was unchanged at Rs 6,400, they said.
In the ready business nearly 10,000 bales of cotton changed between Rs 6150-6700, they said. The seedcotton in Sindh was higher by Rs 100 to Rs 2600-2700 and rates in Punjab also picked up by Rs 100-200 to Rs 2600-2900, they added. Commenting on the present trend in the market some analysts said that prices may show firmness in the near future as mills were busy in pre-Eid buying to keep balance between demand and supply.
The ginners were also busy in phutti buying in the absence of clear cut policy by the government over the waving of 3.5 percent withholding tax on purchase of cotton through the third party, some experts said. It is feared that many cotton ginning factories may close down in the coming days. It was reported that nearly 200 cotton ginning factories are already closed in the country, they said.
Water is standing in farmland particularly in cotton growing areas, may affect quality of cotton, which could bring down the rates also, they said. As a result of expectations for bumper crop, country is expecting for over 15 million bales of cotton this year. Standing water may damage quality, they said.
Recovery in the NY cotton futures and mixed report about the quality likely to push prices up or maintain upward trend in the coming days, they observed. After a survey it is expected that recent rains may damage 0.4-5 million bales of cotton, dealers said. On Tuesday the NY cotton futures finished slightly lower on sales by small investors in the thinnest trading volume since last summer.
The key December cotton contract on ICE Futures US shed 0.19 cent to settle at $1.0385 per lb, trading from $1.0236 to $1.0424. Total turnover was a little over 6,500 lots, Thomson Reuters preliminary data showed. That would be half as much as Monday and the lowest since June 25, 2010, ICE Futures US data showed.
The following deals reported: 1000 bales of cotton from Shahdad Pur sold at Rs 6200-6250, 1000 bales of cotton from Tando Adam at Rs 6200-6250, 200 bales of cotton from Mir Pur Khas at Rs 6250, 400 bales of cotton from Matiyari at Rs 6200-6250, 1200 bales of cotton from Sanghar at Rs 6150-6200, 200 bales of cotton from Kotri at Rs 6200, 200 bales of cotton from Hala at Rs 6200, 400 bales of cotton from Khipro at Rs 6200, 600 bales of cotton from Khanewal at Rs 6700, 400 bales of cotton from Jhang at Rs 6600-6700, 200 bales of cotton from Rahim Yar Khan at Rs 6700, 600 bales of cotton from Vehari at Rs 6600, 400 bales of cotton from Gajjo mandi at Rs 6600, 200 bales of cotton from Bhowana at Rs 6600, 400 bales of cotton from Bahawal Pur at Rs 6600, 600 bales of cotton from Hasil Pur at Rs 6600, 400 bales of cotton from Multan at Rs 6600, 400 bales of cotton from Duniya Pur at Rs 6600, 400 bales of cotton from Burewala at Rs 6575 and 200 bales of cotton from Mailisi at Rs 6550.
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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 16.08.2011
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37.324 Kgs 6,400 120 6,530 6,530 NIL
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Equivalent
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40 Kgs 6,859 120 6,989 6,989 NIL
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