Soaring prices and acute shortage of fine quality kept the buyers confused on the cotton market on Wednesday, experts said. The Karachi cotton Association (KCA) official spot rate was higher by 50 at Rs 3650. Just two deals finalised at the peak level at Rs 4000, they noted.
Several buyers were on the sidelines as they have already bought or some are hoping that price may come down to make new deals, they said. Those, who have imported enough to meet the import commitments, were looking a little bit worried about the variety as quality is not matching with the export parity levels, they said.
This factor may cause falling trend in the textiles if mills' are not able to compete the world market, they said. In the meantime, the ginners, who have good quality of cotton, were not prepared to sell at the present level, instead, they were waiting for further rise in the prices to fetch higher profit, they said.
On Tuesday, the cotton futures crumbled from investor fund sales to finish sharply lower and fibre contracts may sink further on follow-through pressure in the days ahead, brokers said. The market was shut Monday for a holiday.
The benchmark July cotton contract sank 2.96 cents to end at 66.25 cents per lb, trading from 66.21 to 69.65 cents. It was the lowest close for cotton on a spot basis since late December. The new-crop December cotton contract lost 3.00 cents to finish at the session low of 75.01 cents, with the day's high at 78.44 cents. The following deals were struck : 400 bales from upper Sindh sold at Rs 4000 and same figure from Harappa at the same level, they said.
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The KCA Official Spot Rate for Local Dealings in Pak Rupees
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FOR BASE GRADE 3 STAPLE LENGTH 1-1/32"
MICRONAIRE VALUE BETWEEN 3.8 TO 4.9 NCL
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Rate Ex-Gin Upcountry Spot Rate Ex-Karachi
for Price Sales Tax @ 15%
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37.32 Kgs 3,650.00 50 3,700.00
Equivalent-------------------------------------------------
40 Kgs 3,912.00 50 3,962.00
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