Stern behaviour by ginners toward prices caused a drastic fall in the volume of business on the cotton market on Saturday, dealers said. Official spot rate was unchanged at Rs 5,850, they said. Above, 9000 bales of cotton finalised between Rs 5250 and Rs 6000, they said.
According to some brokers, if the ginners not bring down the asking prices, this factor may hurt their strategy and they unwillingly cut prices to keep business on, otherwise, the mills, who are imports, likely to rise import, because they (mills and spinners) getting fine quality from the foreign countries. Pakistan is losing a huge amount of foreign exchange due to fall in exports, and on the other hand, rise in imports.
They said that India allowed its exporters to export more cotton, as it has huge stock of unsold cotton, making a room to earn foreign exchange. Cotton analyst Naseem Usman said that the ginners are in aggressive mood as according to them, they were selling at low prices and on the other hand, their profit is decreasing due to high cost of production.
According to the Reuters, the US cotton futures closed higher, ending the month up 3.5 percent as bargain hunting by mills helped offset speculative short selling on expectations of a record global surplus and concerns about a gridlock in US budget talks. Open interest, the number of contracts outstanding, has slumped to January lows around 160,000 lots. To be sure it is typical for open interest to drop after options expiry, but prices stuck in a 5-cent range and an absence of liquidity in the forward price curve have kept specs on the sidelines.
The most-active March contract on ICE Futures US rose 0.56 cent, or 0.76 percent, to settle at 73.91 cents per lb on Friday on fund rebalancing ahead of the month end. Price gains were capped at 74 cents. The close above last Friday's settlement of 71.43 cents per lb bodes well for fibers next week.
The following deals were reported: 600 bales from Shahdadpur at Rs 5250-5650, 800 bales from Tando Adam at Rs 5250-5650, 400 bales from Mirpur Khas at Rs 5250, 400 bales from Khairpur at Rs 6000, 400 bales from Upper Sindh at Rs 6000, 400 bales from Yazman Mandi at Rs 5900, 600 bales from Vehari at Rs 5900, 400 bales from Uch Sharif at Rs 5850, 200 bales from Kachi Wala at Rs 5900, 400 bales from Hasilpur at Rs 5900, 400 bales from Haroonabad at Rs 5900, 200 bales from Faqirwali at Rs 5900, 400 bales from Bahawalpur at Rs 5900, 600 bales from Fort Abbas at Rs 5900-6000, 400 bales from Ahmedpur at Rs 5900-5925, 600 bales from Sadiqabad at Rs 5950-6000, 600 bales from Rahim Yar Khan at Rs 5950-6000, 200 bales from Mian Chano at Rs 5900, 400 bales from Lodhran at Rs 5925, 400 bales from Liaquatpur at Rs 5950, 200 bales from Layyah 6000 and 400 bales from Rajanpur 6000, 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 30.11.2012
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37.324 Kgs 5,850 155 6,005 6,005 NIL
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Equivalent
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40 Kgs 6,269 155 6,424 6,424 NIL
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