Firmness prevailed on the cotton market on Wednesday as limited buying by the mills did not compelled the ginners to lower the asking prices, dealers said. The official spot rate was unchanged at Rs 3,600. Nearly, 5,000 bales of cotton changed hands between Rs 3,400-3,700, they added.
Market sources said that higher prices of cotton was the basic factor for the low business and it seems that ginners may show slight flexibility by reducing the asking prices. Some brokers said that Pak exporters were not able to compete in the world market due to high cost of production and global recession.
Locally, there are no required facilities to increase production or make products lucrative for the foreign buyers. The textile mills are demanding to exempt all textile machinery, raw materials such as chemicals and other several items from withholding tax to bring out the textile industry from present crisis, resultantly the textile exports would be able to face the emerging challenges, cotton analysts said.
On Tuesday, the NY cotton futures closed firmer on investment fund buying but profit-taking swiftly capped the advance and the market may see choppy business in the days ahead due to lack of leads, brokers said.
The key July cotton contract climbed 0.83 cent to end at 58.05 cents per lb, dealing from 56.97 to 59.39 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 13,261 lots at 2:35 pm EDT (1835 GMT).
THE FOLLOWING DEALS WERE REPORTED: 400 bales of cotton from Kumb station changed hands at Rs 3,700; 2,163 bales from Rohri at Rs 3,400, 400 bales exporter to mill (Karachi delivery) at Rs 3,700 and 2,000 bales from Rahim Yar Khan 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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