Tight supply of phutti pushed the prices higher on the cotton market on Wednesday, dealers said. Official spot rate was unchanged at Rs 5800, they said. In the ready business, over 9,000 bales of cotton changed hands between Rs 5800-6100, they said.
The prices of seedcotton in Sindh were at Rs 2600-2650 and in the Punjab rates were unchanged at Rs 2600-2700, they said. In fact, the mills are busy in cautious buying in anticipation of rise in prices after Eid holidays, dealers said. Proper supplies of phutti halted in the absence of pickers ahead of Eid holidays, they added.
Naseem Usman said that prices likely to move in tight range due to low arrivals of phutti and trading activity may slow down in the near future. Market participants said that cotton imports in China, the world's largest consumer, surged more than 150 percent year on year in July as Beijing's stockpiling programme raised local prices and made imports more attractive.
Commenting on the future price trend in the market, some analysts said that the cotton Leave Curl Virus (CLCV), which attacked the crop during the last three weeks, is spreading throughout the Punjab. According to some farmers, upto 40 percent of the crop in the province is already affected, so the situation is alarming. The delayed monsoon, un-affordable fertiliser, even costlier diesel, non-existent existent electricity and depressed prices, all have affected adversely the crop. According to the Reuters, the NY cotton prices were higher on Tuesday, recovering some ground lost after a bearish US government supply-and-demand report last week, as the market news of a 150-percent surge in imports to China, the world's largest producer and consumer, in July.
The benchmark December cotton contract on ICE Futures US rose 0.55 percent to settle at 72.09 cents per lb, snapping two days of losses. It eased off an intraday high of 72.98 cents hit earlier in the session. Traders said a small bounce back was inevitable after the hefty 7-percent drop over two days following the USDA's monthly report on Friday, which forecast a record stock level for the 2012/13 marketing year.
But they don't expect the gains to last. Forecasts of a growing surplus to record highs by next July and waning demand will exert further pressure on the market, which could test the 70-cent mark, traders said. "The USDA numbers were so negative, you couldn't fight it," said a floor trader. "I think the market will drift down further. It will test (70 cents)." Prices will likely remain between 69 cents and 76 cents over the coming months, he said, in-line with its range of the past week. Cotton was briefly below 70 cents at the end of July.
The following deals reported: 600 bales of cotton from Shahdad Pur at Rs 5825-5850, 800 bales of cotton from Sanghar at Rs 5825/5850, 800 bales of cotton from Tando Adam at Rs 5825/5850, 400 bales of cotton from Hyderabad at Rs 5825/5850, 600 bales of cotton from Mir Pur Khas at Rs 5825/5850, 1000 bales of cotton from Rahim Yar Khan at Rs 5800/5900, 200 bales of cotton from Dunia Pur at Rs 5800, 400 bales of cotton from Vehari at Rs 5800/5900, 200 bales of cotton from Haroonabad at Rs 5800, 2000 bales of cotton from Burewala at Rs 5800/6100, 600 bales of cotton from Hasil Pur at Rs 5850/6000, 200 bales of cotton from Mubarak Pur at Rs at Rs 5900, 200 bales of cotton from Rajan pur at Rs 5900, 200 bales of cotton from Chichawatni at Rs 5900, 200 bales of cotton from Qatab Pur at Rs 5900, 200 bales of cotton from Jahanian at Rs 5900, 200 bales of cotton from Mongi Bangla at Rs 5925, 200 bales of cotton from Sahiwal at Rs 5975, they said.
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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 13 08.2012
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37.324 Kgs 5,800 130 5,955 5,955 NIL
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Equivalent
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40 Kgs 6,216 130 6,371 6,371 NIL
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