Trade activity slowed down on the cotton market on Saturday as ginners increased the asking prices due to strong demand by the buyers, dealers said. The official spot rate maintained overnight level at Rs 3,300, they said. The phutti prices in both the Punjab and Sindh were at Rs 1600-1750, they added. In the ready business, the highest rate was at 3400, they added.
Market sources said that bullish sentiments persisted as buyers from different quarters were active to cover the near-term amid rising anticipation about the rise in prices following the short crop.
It is visible that the Trading Corporation of Pakistan (TCP)'s presence in the market is stabilising the prices and giving an impression that the rates may not come down sharply, they said. The TCP to open its tender on January 27 to buy 100,000 ordinary cotton bales and another tender is likely to be opened on February 11.
Thanks to the participation of the TCP, which apparently helped the growers to get the better rates. As under the circumstances, as a result of world recession, demand by the importing countries is coming down, the exports of textile products showed declined by 14 percent as compared with the previous month. According to the Federal Bureau of Statistics (FBS), in the month of December 2008, textile export recorded at 720 million dollars against the exports of 751 million dollars during the month of November.
In the meantime, on Friday, an international farm group said that it cut its forecast of the season-average world cotton price by 10 percent due to slumping demand brought on by the global recession and larger stockpiles in China.
On Friday, the NY cotton futures closed at a 14-week top on all-around buying sparked by news a major merchant took out significant amounts of cotton from the exchange, and on large export sales, brokers said.
The key March cotton contract climbed 1.71 cents or 3.49 percent to end at 50.64 cents per lb, trading from 48.89 to 51.55 cents. On a spot basis, it was the highest close for cotton since the middle of October 2008 when it traded above 52.50 cents. Volume traded in the March contract was at 15,119 lots at 2:52 pm EST (1952 GMT). The May contract went up 1.29 cents to conclude at 50.77 cents.
The following deals were reported as some 1000 bales from Shadad Pur sold at Rs 3200, 600 bales from Shah pur Chakar at Rs 3250, 1000 bales from Upper Sindh at Rs 3400, 400 bales from Rahim Yar Khan at Rs 3400, 500 bales from Kassowal at Rs 3300, 400 bales from Bahawal Pur at Rs 3250 abd 400 bales from Ford Abbas were finalised at Rs 3275, dealers 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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37.324 Kgs 3,300.00 100 3,400.00
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Equivalent
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40 Kgs 3,537.00 100 3,637.00
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