Cautious buying by mills and spinners witnessed on the cotton market on Saturday as the ginners were not keen to oblige buyers on expectations of further increase in prices, dealers said. The official spot rate was unmoved at Rs 6700, dealers said. In Sindh, seed cotton prices were at Rs 3200-3550, they said. In Punjab, phutti rates were at Rs 3300 and Rs 3900, as per 40 kg, they added. In the ready session, over 5,000 bales of cotton changed hands between Rs 6500 and Rs 7050, they said. According to market sources, the ginners preferred to be sidelined amid selective buying. The spinners were taking interest in fresh buying with some reservation but the ginners were trying to raise prices due to short supply position.
Cotton analyst, Naseem Usman said that the improvement in the cotton yarn rates was an encouraging matter, because of this factor, the spinners were making new deals to replenish their cotton stock, but at the same time, they were facing a kind of difficulty in getting quality cotton which was running in short supply.
The limited stocks of around 900,000 bales of cotton held by ginners a cause of worry for spinners who have no wait till the arrivals of next crop, other brokers said.
Some experts also said that Pakistan, India and China are major producers, but facing shortage problem and importing cotton from US to meet their requirements. Adds Reuters: Cotton futures fell on Friday to snap a three-day rally as investors rolled positions forward ahead of the March contract expiry.
"The market is just taking a pause, the index roll is keeping a lid on the prices," said Louis Barbera, a broker at ICAP Cotton in New York.
The March cotton contract on ICE Futures US, which hit a six-month high in the previous session, was up 2 percent this week. This was the third straight weekly gain for the natural fibre market.
The following deals reported: 400 bales from Shahdadpur at Rs 6500, 2000 bales from Sadiqabad at Rs 6900, 1000 bales from Fort Abbas at Rs 7025 (conditional), same figure from Lodhran at Rs 7050 and 1000 bales from Alipur at the same rate, 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 1-1/16"
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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 Expenses Ex-Karachi Ex. KHI, As Ex-Karachi
on 03-02-2017 in Rupees
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37.324 kg 6,700 135 6,835 6,835 NIL
Equivalent
40 kgs 7,180 145 7,325 7,325 NIL
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