Prices showed slight improvement on the cotton market on Wednesday amid modest trading activity, dealers said. Official spot rate was unchanged at Rs 5,500, they added. In ready business, only 1700 bales of cotton changed hands between Rs 5000-5800, they said.
Some brokers said that despite falling demand, the growers were busy in cotton sowing on expectations of increase in buying by importing countries. They said that the growers may shift their position from cotton crop to rice cultivation due to shortage of irrigation water.
Persisting fall in the cotton rates the world over is causing a change in behaviour of growers, the mills, spinners and exporters are in grip of uncertainties due to substantial unsold stock with the, analysts said. According to the Reuters, the NY cotton futures ended down on Tuesday near a 3-year low for the third consecutive session in the face of bumper supplies and a weak global economic outlook, said brokers who expected the market to remain on the defensive. The euro zone debt crisis showed signs of escalating after Spain said it was being shut out of credit markets. The now benchmark December cotton contract on ICE Futures US fell 1.70 cents, or 2.5 percent, to close at 65.36 cents per lb, dealing between 65.26 and 67.69 cents. It was an inside day as that trading range held within Monday's 64.61 to 67.95 cents band.
It was the lowest close for the third position cotton contract since early October 2009, Thomson Reuters data showed.Spot July cotton lost 1.64 cents to finish at 66.89 cents a lb, moving from 66.79 to 69.85 cents. Volume on Tuesday reached almost 36,000 lots, almost 50 percent more than the 30-day norm, Thomson Reuters data showed. The following deals were reported; 200 bales of cotton from Vehari (low quality) sold at Rs 5000, 300 bales from Ali Pur at Rs 5400, 400 bales of cotton from Dnia Pur at Rs 5550-5575, same figure from Lodhran at Rs 5800 and equal number from Rahim Yar Khan at the same price, they added.
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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 05.06.2012
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37.324 Kgs 5,500 130 5,630 5,630 NIL
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Equivalent
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40 Kgs 5,894 130 6,024 6,024 NIL
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