A few deals were reported on the cotton market on Tuesday as phutti arrivals are almost near to end, dealers said. Official spot rate was unchanged at Rs 6,000, they added. In ready business, nearly 3,000 bales of cotton changed hands between Rs 5000-6200, they said. Thin trading was seen as like other countries of the world, Pakistan is facing trouble after fall in the demand by the textile importing countries, other dealers said.
Explaining the latest situation in the country after the decline in the cotton rates, Naseem Usman said that in the country both importers and exporters are faced with tough time, because, exporters, who bought cotton to sell, but, presently situation is changed because the NY cotton started dropping sharply, local exporters were selling fine quality of cotton to local buyers in the absence of foreign demand, experts said. Uncertainties are hovering all over the business due to persisting weak economic condition in the globe, he added.
Bangladesh is one of the Least Developed Countries (LDC), so European Union (EU) countries have not impose any import duty and this factor helped the BD exporters, because despite world recession, the BD exporters are not in woods, Naseen Usman said. But on the other hand, local yarn and cotton exporters were facing difficulties due to fall in the prices during the year, Naseem said.
In fact, BD exporters have some basic incentives from their country, one of them is cheaper women labour, poor women get nearly half wages against the male labourers. One thing is very interesting that Bangladesh is not a cotton producing country, but struggling hard to improve its performance in the ready-made garments and textile sectors. And due to concessions by the EU and some other importing countries, it looks that BD has to certain extent in a position to keep its exports at a level, he add.
Many cotton traders in BD, imported the stuff, when prices were going up some times ago, to save their money, but now rates came down to nearly half and local BD banks were trying to recover the loans from importers. According to the Reuters, the NY cotton futures closed mixed on Monday as the market sought to recover after tumbling to a near two-year low last week although the outlook for fiber contracts remains bearish due to bumper supplies, analysts said.
July cotton on the ICE Futures US exchange closed down 0.15 cent at 78.82 cents per lb, trading from 77.85 to 79.90 cents. It was an inside day since the range was within Friday's 77.16 to 81.76 cents band. On Friday, the contract ended at 78.97 cents in the lowest close for the spot contract since July 2010, according to Thomson Reuters data. A reading of 30 or below normally means a market is oversold and one of 70 or higher meant it is overbought. New-crop December added 0.36 cent to end at 76.70 cents, dealing from 75.40 to 77.40 cents. The contract also saw an inside day, with the range within Friday's 74.46 to 79.17 cents range.
The following deals were reported: 600 bales of cotton from Lodhran (low quality) sold at Rs 5000, 400 bales from Kotla Moosa at Rs 5800, 200 bales of cotton from Kabir Wala at the same rate, 630 bales of cotton from Bahawal Pur at Rs 5800, 200 bales from Lodharan at Rs 6100 and 400 more bales from Rahim Yar Khan at Rs 6200.
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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 14.05.2012
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37.324 Kgs 6,000 130 6,130 6,130 NIL
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Equivalent
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40 Kgs 6,430 130 6,560 6,560 NIL
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