Strong demand by the mills pushed the prices higher on the cotton market on Saturday and it seems that the rates may go further up as stock of fine quality is coming down, dealers said. The official spot rate was appreciated by Rs 50 to Rs 3,600.
The Phutti in Sindh and Punjab was quoted at Rs 1,800. Nearly 8,000 bales of cotton changed hands between Rs 3,525-3,700 as ginners did not lower the asking rates, they added. Market sources said that the prices moved up on higher demand by the mills ahead of the Pakistan Cotton Ginners Association (PCGA) fortnightly report.
It is likely that the mills may not depend or wait for the rescue move by the Trading Corporation of Pakistan (TCP) as they were not expecting the corporation would be able to lower the price due to diminishing unsold stock, they said. Instead they may take part in hide-and-seek game as no one wants to lose a golden chance, they said.
On Thursday, the NY cotton futures ended at a 6-1/2-month high on all-around buying, but analysts feel the market's advance could slow down because it is a bit overbought, brokers said. The most-active July cotton contract climbed 1.01 cents to close at 54.35 cents per lb, dealing from 52.66 to 54.45 cents. It was the highest finish for cotton on the second position charts since the middle of October 2008.
Volume traded in the July contract was at 9,626 lots at 2:39 pm EDT (1839 GMT). Spot May cotton went up 0.65 cent to end at 53.49 cents. On Friday, the NY cotton futures settled near a seven-month high on all-around buying led by index funds, with the momentum set to spill over into next week, brokers said.
The most-active July cotton contract climbed 2.85 cents, up 5.24 percent on the day, to close at 57.20 cents per lb., dealing from 54.05 to 57.24 cents. It was the highest finish for cotton on the second-position charts since the start of October 2008. Volume traded in the July contract was at 18,021 lots at 2:38 pm EDT (1838 GMT).
Spot May cotton went up 3.03 cents to end at 56.52 cents. The following deals were reported: 400 bales of cotton from Dharki sold at Rs 3,650; 200 bales from Ghotki at Rs 3,525; 2,000 bales from Khanpur at Rs 3,700; 3,000 bales (mill to mill) at Rs 3,625 and 2,000 bales from Khanpur at Rs 3,700, 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 3,600.00 100 3,700.00
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Equivalent
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40 Kgs 3,858.00 100 3,958.00
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