Official spot rate closed higher by Rs 100 as mills and exporters increased buying to meet the near-term requirements, dealers said on the cotton market on Thursday. Official spot rate was raised by the Karachi Cotton Association (KCA) by Rs 100 to Rs 5600, they added.
Prices of seedcotton in Sindh were higher at Rs 2000-2300, and in the Punjab at Rs 2100-2750, they said. Around 7000 bales of cotton changed hands between Rs 4000-6000, they added.
Market sources said that decline in unsold stock and higher trend in the NY cotton futures, pushed up prices and it is likely that rates show stable trend in the coming days.
Persisting demand by China and Bangladesh, increased volume of trade despite slow supplies, they said. Apprehensions about low demand may help prices to hold the firmness in the near futures, they said.
According to the Reuters the NY cotton futures rallied on Wednesday, with the May contract briefly breaching its 100-day moving average, on short-covering triggered by concerns about nearby supply tightness due to China's voracious buying.
Concerns about nearby tightness were inflamed by Tuesday's US government data that revealed stronger-than-expected buying by Beijing's strategic reserve.
That sent nearby prices higher, but fears about an overhang of stock going into the new season in August hurt forward prices and pushed the backwardation to a January high. The benchmark May cotton contract on the ICE Futures US exchange settled up 1.84 percent at 91.38 cents per lb after breaching its 100-day moving average of 91.98 cents.
Prices rose as much as 3.22 percent to 92.62 per lb, the biggest daily rise since March 5, before easing in the afternoon. The 200-day moving average at 95.97 cents remained elusive. A drop in open interest of 11,455 contracts, taking the May contract total to 47,116 overnight, revealed the extent of the race by merchants and hedge funds to cover their short positions ahead of the Friday options expiry.
The following deals were reported: 400 bales of cotton from Sadiqabad sold at Rs 4200-5300, 200 bales of cotton from Saleh Pat (Low Quality) at Rs 4000, 400 bales of cotton from Pano Aqil sold at Rs 6000, 200 bales of cotton from Chichawatni at Rs 5200, 200 bales of cotton from Kabbir Wala at Rs 5250, 400 bales of cotton from Arif Wala at Rs 5400, 200 bales of cotton from Vehari at Rs 5550, 400 bales of cotton from Multan at Rs 5550, 200 bales of cotton from Shorkot at Rs 5600, 200 bales of cotton from Chistian at Rs 5650, 200 bales of cotton from Abdul Hakim at Rs 5700, 400 bales of cotton from Bahawal Pur at Rs 5700-5800, 800 bales of cotton from Muhammad Pur Dewan at Rs 5700, 200 bales of cotton from Shujabad at Rs 5800, 400 bales of cotton from Fort Abbas at Rs 5950 and 1000 bales from Rahim Yar Khan at Rs 5800-6000.
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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 11.04.2012
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37.324 Kgs 5,600 130 5,730 5,630 +100
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Equivalent
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40 Kgs 6,002 130 6,132 6,024 +108
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