Moderate trading was seen on the cotton market on Wednesday as mills were present but not in the big way mainly because of higher asking prices, dealers said. The official spot rate remained unchanged at the overnight level at Rs 3,550. The Phutti in Sindh and Punjab was quoted at Rs 1,800.
In the ready business, about 5,000 bales changed hands between Rs 3,500-3,700, they said. According to some brokers, there is rising interest among the mills as they do not want to lose more time in anticipation of falling trend in the prices.
Secondly, the spinners were also keeping an eye over the prices of new production, showing significant rise on quality factor, so they are purchasing as much as they can buy from the old crop, they added. Cotton analysts were of the view that prices are on the upside for the new production now, but the other factor, which could not be denied is, if the weather condition prove not favourable for standing crop in the field, the rate may go up further in the coming days.
That is why panic buying by the mills has been observed during the last several sessions. Cost of inputs and non-availability of power and gas are on the other hand, an added hurdle for the mills, they said. On Tuesday, the NY cotton futures settled lower on investor sales as the market came off a six-month high and appears set to consolidate while waiting for fresh leads, brokers said.
The most-active July cotton contract added 0.32 cent to close at 52.75 cents per lb, dealing from 52.07 to 53.25 cents. It was an inside day since the range held within Monday's 51.33 to 53.37 band. On Monday, the contract closed at 53.07 cents in the loftiest finish for cotton on the second-position charts since late October. Volume in the July contract amounted to 6,554 lots as of 2:38 pm EDT (1838 GMT). Spot May cotton went up 0.08 cent to end at 52.05 cents, trading from 51.30 to 52.40 cents.
The following deals were reported: 400 bales of cotton from Karachi (exporter to mill) sold at Rs 3,600; 600 bales from Buchari at Rs 3,700; 1,400 bales from Fazil Pur at Rs 3,500; 1,000 bales from Burewala at Rs 3,590; 800 bales from Noor pur Noranga at Rs 3,550; 890 bales from Ahmed pur East at Rs 3,550, 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 3,550.00 100 3,650.00
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Equivalent
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40 Kgs 3,805.00 100 3,905.00
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