Cotton market: Volume of business falls due to higher rates

Trading activity slowed down on the cotton market on Friday as mills kept on the sidelines mostly because of higher rates, dealers said.

The official spot rate was unchanged at Rs 9100, they added. In ready session, 11,000 bales of cotton changed hands between Rs 8900-9400, they said.

Rates of seed cotton per 40kg in Sindh were higher at Rs 3000-4400 and in the Punjab prices were at Rs 3600-4500, they said. In Balochistan, seed cotton prices were at Rs 4200-4700 and cotton prices were at Rs 8700-8900, they said.

In Sindh, Binola prices per maund were at Rs 1400-1700 and in Punjab rates were at Rs 1550-1650, they said and adding that polyester fibre was at Rs 187.

According to the market sources, most of the leading mills were on the sidelines due to short supply of fine quality cotton, against the high rates. They need huge amount to pay sales tax on cotton yarn, but on the other hand facing a liquidity crunch.

Cotton analyst, Naseem Usman, sharing the same views, said that textile spinning unit with no facility of remission of duty and taxes remained busy in booking big lot deals to meet their cotton demand.

Adds Reuters: ICE cotton futures fell on Thursday, retreating from an over one-week peak hit earlier, after a weekly government report showed lower than expected exports and sales of the natural fibre.

The front-month December contract fell 0.3% at 64.73 cents per lb as of 11:57 am EDT (1557 GMT). It traded within a range of 64.63 cents and 65.55 cents a lb, its highest since October 14.

Total futures market volume fell by 10,712 to 13,093 lots. Data showed total open interest gained 1,289 to 239,201 contracts in tthe previous session.

The following deals reported: 1000 bales of cotton from Khairpur Mirs at Rs 8900/9000, 600 bales from Saleh Pat at Rs 9000, 400 bales from Rohri at Rs 9000, 400 bales from Mirpur Mathelo at Rs 9400, 600 bales from Ghotki at Rs 9400, 200 bales from Vehari at Rs 8850, 1000 bales from Hasilpur at Rs 8900/9100, 400 bales from Rajanpur at Rs 9000, 200 bales from Bahawal Nagar at Rs 9000, 400 bales from Faqeerwali at Rs 9100, 200 bales from Chistian at Rs 9100, 1200 bales from Ahmedpur at Rs 9100, 1200 bales from Haroonabad at Rs 9100/9150, 600 bales from Yazman Mandi at Rs 9150/9200, 400 bales from Fort Abbas at Rs 9200, 200 bales from Khanewal at Rs 9300, 600 bales from Mianwali at Rs 9300 and 1200 bales from Rahim Yar Khan at Rs 9300, 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 1-1/16"
                    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 24-10-2019
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37.324 kg          9,100      160        9,260         9,260            NIL
Equivalent
40 kgs             9,752      171        9,923         9,923            NIL
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