Cotton market: prices may slide more as India eases export rules for cotton, yarn

Locally, prices which are continuously on bottom side, may depict further softness as India eased export rules for cotton and yarn, dealers said on the cotton market on Monday. The official spot rate was unchanged at Rs 4,650, they added. In the ready session, about 14,000 bales of cotton changed hands between Rs 4500-4900, they said. In Sindh, prices were unchanged at Rs 1500 and Rs 2400, in Punjab prices were also inert at Rs 1600 and Rs 2500, they said.
Cotton analyst, Naseem Usman said that prices may not show significant improvement in times to come. To stabilise prices, the Cotton Corporation of India (CCI) has started purchasing nearly 10 million bales of seed cotton from local growers to support them, President of Cotton Association of Pakistan, Dhiren N Sheth, said.
This year, India to get record 40 million bales of cotton production, local growers are worried as China is sidelines, which is causing sharp fall in the prices, he said. Local ginners and growers both were under pressure due to rising unsold stock and declining trend in the rates with the passage of time, other analysts said.
Reuters adds: India has eased cotton and cotton yarn export rules to boost overseas sales as slowing demand from China has hit the South Asian nation's trade in the commodity. With the change in rules, India has 'dispensed with' the registration requirement for exports of cotton and cotton yarn, the government said on Monday in two separate notifications. Prior to Monday's notifications, traders were required to register in advance their targeted export volume for the year.
The following deals reported: 2000 bales of cotton from Khairpur at Rs 4650, 1000 bales from Chichawatni at Rs 4500, 1200 bales from Burewala at Rs 4500, 200 bales from Bakhar at Rs 4550, 400 bales from Bahawal Nagar at Rs 4600, 400 bales from Chistian at Rs 4600, 1800 bales from Haroonabad at Rs 4600-4725, 1000 bales from Layyah at Rs 4750, 800 bales from Alipur at Rs 4750, 400 bales from Shadan Lund at Rs 4750, 400 bales from Khanewal at Rs 4750, 400 bales from Basti Malook at Rs 4775, 1000 bales from Ahmedpur at Rs 4800, 1000 bales from Sadiqabad at Rs 4800, 1000 bales from Liaquatpur at Rs 4800, 1200 bales from Rahim Yar Khan at Rs 4800/4900 and 1000 bales from Mianwali at Rs 4900, 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 06.12.2014

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37.324 Kgs         4,650      150         4,800        4,800            NIL

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Equivalent

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40 Kgs             4,983      160         5,143        5,143            NIL

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