Amid hopes of softening the lockdown during the holy month of Ramazan traders were hopeful that trading activity will improve in the cotton market. According to market sources traders were putting pressure on the government that they should allow them to open their shops providing following the Standard Operating Procedures. They were of the view there majority of their business was in Ramazan so the government should allow them to open their shops.
Cotton Analyst Naseem Usman told that Pakistan Cotton Ginners Association is not issuing their monthly report for the last two months because they are unable to get exact figures regarding production of cotton.
He stressed his hope that new crop of cotton will start arriving from the month of June from some areas of Punjab and Sindh. Naseem said that spot rate remained unchanged at Rs 8800. He also said that although no trading was seen in Binola. However Binola was available in both Sindh and Punjab at the rate of Rs 1600 to Rs 1800 per maund. Sources also said that cotton seed was not available for trading as ginners had all the stock of Binola. The rate of cotton in Sindh and Punjab is in between Rs 7000 to Rs 8800 per maund. The rate of polyester fiber was at Rs 167 per kg.
Earlier, ICE cotton futures surged as much as 5% to their highest in nearly a month on Wednesday, on expectations that top consumer China is going to purchase the natural fiber among other agricultural commodities from the United States.
The cotton contract for July rose 2.33 cent, or 4.37 %, at 55.64 cents per lb as of 12:06 p.m. EDT (1606 GMT). Prices hit their highest since March 20 at 56 cents per lb earlier in the session.
"There is talk that China is going to issue new quotas to buy US cotton. Rumors have come mainly from grain merchants who have picked up that there is going to be corn, soybeans, sugar, soybeans oil and cotton bought," said Rogers Varner, president of Varner Brokerage in Cleveland, Mississippi.
"But these quotas stretch out almost 2 years so its something that has a long lifetime, and nobody knows if these quotas are going to be met but the initial reactions to this is positive." The United States is one of the world's biggest producers of cotton.
Imports of US cotton were at 124,000 tonnes, up 43.5% in first quarter from last year, a customs data showed earlier this month. The natural fiber have declined about 20% so far this year, as the world economy gets battered by the coronavirus pandemic, which has paralysed demand and locked many countries across the world.
Investors are now awaiting the release of the US Department of Agriculture's weekly export sales data due on Thursday. Total futures market volume rose by 2,206 to 30,698 lots. Data showed total open interest fell 1,604 to 179,858 contracts in the previous session.
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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 22-04-2020
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37.324 kg 8,800 160 8,960 8,960 NIL
Equivalent
40 kgs 9,431 171 9,602 9,602 NIL
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