A decline in fine quality cotton caused firmness in rates on the cotton market. The one-year New York high also contributed to stability in local prices, dealers said. The official spot rate stopped upward march, holding the overnight level at Rs 6,800, they said. Rates of seed cotton in Sindh were inert at Rs 2,400-3,100 and in Punjab prices were inert at 2,300-3,340, they said. In the ready business, approximately 4,000 bales of cotton changed hands between Rs 6,050 and Rs 7,000, they said.
Commenting on the latest development, cotton analyst Naseem Usman said prices were higher on the global market and causing firmness on the local cotton market. In Korangi, cotton warehouse and godown caught fire, which might cause heavy damage and huge losses, other analysts said. Furthermore, China will issue extra cotton import quotas to textile mills by around April after purchases for the government's stockpile cut domestic supplies, trade sources said on Friday.
The market expects Beijing to allocate as much as 800,000 tonnes of import quotas, most of which will be issued to textile mills that export their products, traders said. That will add to 894,000 tonnes of low-tariff quotas issued earlier this year. According to Reuters, Cotton prices surged on Friday, reaching the highest level in nearly a year, on fund buying and short-covering amid expectations that No 1 textile market China will continue buying even as prices rally.
The most-active May cotton contract on ICE Futures US closed up 1.64 cents, or 1.8 percent, at 92.50 cents per pound. Earlier, it climbed as high as 93.93 cents, the highest price for the spot contract since late March 2012. The following deals were reported: 2,000 bales of cotton from Khairpur at Rs 6,800, 1,200 bales of cotton from Rohri at Rs 7,000, 200 bales from Dran Wala at Rs 6,050, 107 bales from Lodhran at Rs 6,400, 200 bales from Faqir Wali at the same rate and 600 bales from Bahawal Pur at Rs 6,400-7,000, 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 15.03.2013
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37.324 Kgs 6,800 155 6,955 6,955 NIL
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Equivalent
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40 Kgs 7,288 155 7,443 7,443 NIL
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