Prices of seed cotton fell on the cotton market on Thursday following the United States Department of Agriculture (USDA) crop report about record global inventories, dealers said. The official spot rate was inert at Rs 6,800, they said. Rates of seed cotton low type in Sindh dropped by Rs 200 to at Rs 1,800 and best type fell by Rs 300 to Rs 2,400, while in the Punjab inferior variety shed by Rs 200 to 1,800 and the superior type fell sharply by Rs 600 to Rs 2,500, they said.
In the ready business, 6,000 bales of cotton changed hands between Rs 5,200 and Rs 7,100, they said. There is liquidity crunch in the market, which is not allow the mills to buy above their psychological levels, and now USDA report is another factor, which may bring down the volume of business further down in the coming days, experts said.
The ginners, who were looking interested in selling unsold stock, but not at so much cheaper rates, are already facing huge losses due to steep fall in the prices of cotton, cotton analyst Naseem Usman said. Report is showing that China will continue its controversial cotton stockpiling policy this year in a move that will boost imports by the world's top consumer and underpin global prices.
Global cotton supplies have been under pressure due to the stockpiling policy that has seen China buy about 10 million tonnes or 60 percent of the world's cotton stocks since 2011. According to the Reuters, futures rose on Wednesday, thanks to broad gains in US financial markets and news of a Brazilian tariff cut, though a US Agriculture Department crop report projecting record global inventories deflated some of the day's upward momentum.
The most-active May cotton contract on ICE Futures US settled up 0.73 cent, or 0.86 percent, at 85.37 cents a lb. The following deals were reported: 600 bales of cotton from Kot Ghulam Mohammad at Rs 5200, 400 bales from Sui Gas at Rs 6450, 1175 bales from Dehrki (conditional) at Rs 7100, 200 bales from Faqir Wali at Rs 6400, 400 bales from Rahim Yar Khan at Rs 6400-6800, 800 bales from Mian chano at Rs 6500 and 2604 bales from Hasil Pur at the same rate, 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 10.04.2013
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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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