A downward trend was again witnessed on the cotton market on Wednesday as a result of panic selling by the ginners, dealers said. The official spot rate failed to halt slide for the second day in a row, losing Rs 50 to Rs 5350, dealers said. In Sindh, seed cotton prices were at Rs 2500 and Rs 2800 and in the Punjab rates were at Rs 2600 and Rs 3000, they said.
In the ready business, nearly 12,000 of deals were finalised between Rs 4750 and Rs 5650, they said. Some brokers said that landing of imported cotton, propelled ginners to sell cotton to keep away from future losses. Sharing the same, cotton analyst, Naseem Usman said that in fact the ginners were under pressure because of fall in rates. It is most probably that prices may stay at a certain level, then both the buyers and sellers will take position.
Other analysts said that last days reports came up that total cotton production is short of demand, this factor pushed rates higher, so that the mills and spinners started importing cotton from other countries to keep themselves away from losses. Reports showing that India is likely to export 6.8 million bales in the 2015/16 season, up 18 percent from a year ago as demand from Asia is expected to improve, a senior government official told reporters on Tuesday. Higher exports will cap global prices, but raise domestic prices and help bring down government purchases at the support price.
Adds Reuters: ICE cotton futures fell for the second straight session on Tuesday, as forecasts for dry weather in leading US growing regions allowed for harvesting to continue after recent rains, and bearish demand sentiment weighed on prices. December cotton on ICE Futures US settled down by 0.72 cent on Tuesday, a 1.1 percent loss, at 62.57 cents per pound. It traded within a range of 62.52 and 63.85 cents a pound.
In its second day of trading, ICE's world cotton contract saw 109 lots for May 2016 delivery change hands, up from 21 the prior session. It settled down 0.2 percent at 71.10 cents a lb. Total futures market volume rose by 4,107 to 32,264 lots. Data showed total open interest fell 30 to 199,706 contracts in the previous session.
The following deals reported: 1400 bales from Tando Adam at Rs 4750, 400 bales from Sarhari at Rs 5200, 3000 bales from Khairpur at Rs 5450-5500, 1000 bales from Upper Sindh at Rs 5550, 200 bales from Vehari at Rs 5300, 200 bales from Duniyapur at Rs 5400, 200 bales from Bakhar at Rs 5400, 400 bales from Hasilpur at Rs 5400, 600 bales from Chistian at Rs 5400-5525, 400 bales from Ahmedpur at Rs 5500, 600 bales from Haroonabad at Rs 5500, 400 bales from Mianwali at Rs 5500, 400 bales from Layyah at Rs 5500, 400 bales from Alipur at Rs 5500, 600 bales from Fort Abbas at Rs 5500-5525, 400 bales from Yazman Mandi at Rs 5525, 200 bales from Fazilpur at Rs 5550, 600 bales from Rahim Yar Khan at Rs 5650 and 600 bales from Sadiqabad at Rs 5650, dealers 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 03-11-2015
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37.324 kg 5,350 135 5,485 5,535 -50
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Equivalent
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40 Kgs 5,734 145 5,879 5,932 -53
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