Modest trading was seen on the cotton market on Thursday as a few mills indulged in the new purchases, dealers said. The official spot rate was unchanged at Rs 3150, they said. The phutti prices in both the Punjab and Sindh were at Rs 1500-1600. In the ready business, rates moved between Rs 3000 and Rs 3225, they added.
Market sources said that business activity was showing slight improvement after the settlement of judges issues and it is expected that after the rise in foreign demand for exports items, trading activity may depict further upwards movement in the coming days.
Its a good sign that some political issues have been settled down apparently but more steps required to tackle the emerging challenges as trade deficit is widening with the passage of time, they said.
The mills were buying cotton to meet the remaining requirements, because they have to cover their export consignments. Expectations are high despite the fact that demand for export items were not rising due to world recession, they added.
According to the government organisations in China, the worlds largest consumer and producer, the cotton demand in the country has remained weak, which is likely to keep domestic cotton prices low and lead farmers to plant less this year. "At present the textile export situation is grim, cotton demand has not warmed up and downward pressure still exists for domestic prices," the National Development and Reform Commission (NDRC) said in a monthly report.
Giving an impression that the if demand not improved for textile items, the growers may start shifting their position from cotton to other crop, many analysts said. On Wednesday the NY cotton futures settled lower on investor liquidation although losses were trimmed by possible consumer buying in the market.
The key May cotton contract lost 1.13 cents to end at 41.72 cents per lb, trading from 41.54 to 43.09 cents. July fell 1.02 cents to 42.63 cents. Volume traded in the May contract was at 10,653 lots at 2:36 pm EDT (1836 GMT).
The following deals were reported: 1550 bales of cotton from Bhawalpur sold at Rs 3150, 400 bales from Yazman Mandi at the same rate, 700 bales from same station at Rs 3225 and 1200 bales from Noorpur Noranga at Rs 3000, 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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37.324 Kgs 3,150.00 100 3,250.00
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Equivalent
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40 Kgs 3,376.00 100 3,476.00
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