Trading activity slowed down on the cotton market on Thursday as mills and spinners preferred to be sidelined due to shortage of transport ahead of Eid-ul-Azha holidays, dealers said. The official spot rate was lower by Rs 50 to Rs 5,100, they added. In the ready session, over 5,000 bales of cotton changed hands between Rs 5000 and Rs 5300, they said. In Sindh, rates were unchanged at Rs 2350 and Rs 2450, in Punjab prices were at Rs 2200 and Rs 2450, they said.
Cotton analyst, Naseem Usman said that Eid holidays are very close and sellers of sacrificial animals were busy in reaching from one place to another to sell their animals, causing transportation problem for the mills and spinners. Other analysts said that the ginners were facing financial shortage since prices have started falling in the local market. They expect prices may stabilise after the Economic Co-ordination Committee (ECC) decision.
On Thursday, the ECC approved the support price recommended by Agriculture Policy Institute (API) of Rs 3000 per 40 kg for base grade 3 cotton and the Trading Corporation of Pakistan (TCP) would procure one million bales at this price.
Reuters adds: The unprecedented size of cotton stocks is driving down prices for the commodity, Louis Dreyfus cotton chief Joe Nicosia said on Wednesday. "We have 106 million bales of ending stocks - that unprecedented number is the problem," Nicosia, the global head of cotton at Louis Dreyfus Commodities B.V., said at a conference in Dubai. Cotton futures prices are also under pressure from a strong US dollar and fears that reduced demand in top consumer China will cause global inventories to swell. Prices fell to a five-year low of 60.83 cents a lb last week after a long-expected policy overhaul that will sharply reduce import demand in China, the world's largest textile market.
The following deals reported: 400 bales of cotton from Sanghar at Rs 5000, 800 bales from Khairpur at Rs 5200, 400 bales from Arifwala at Rs 5150, 600 bales from Burewala at Rs 5150, 800 bales from Hasilpur at Rs 5150, 500 bales from Samundri at Rs 5150, 200 bales from Vehari at Rs 5150, 200 bales from Chistian at Rs 5150, 200 bales from Daranwala at Rs 5150, 200 bales from Adda Flor at Rs 5150, 200 bales from Layyah at Rs 5200, 200 bales from Head Bakani at Rs 5250, 200 bales from Mian Chano at Rs 5300, 200 bales from Rajanpur at Rs 5300 and 200 bales from Pir Mehal at Rs 5300, they said.
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The KCA Official Spot Rate for Local Dealings in Pakistan 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 01.10.2014
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37.324 Kgs 5,100 150 5,250 5,300 -50
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Equivalent
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40 Kgs 5,466 160 5,626 5,679 -53
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