Prices continued overnight weakness, showing Rs 25 fall in spot rate for the third day in a row on the cotton market on Thursday, dealers said. The official spot rate was reduced by another Rs 25 for the third day in a row at Rs 3475, thus, since the week stared the official spot is lower by Rs 75. More than 30,000 bales changed hands between Rs 3450-3500, they said.
Phutti prices in Sindh were same at Rs 1650-1675 and in Punjab at Rs 1650-1725, they added. Some brokers said that the prices were falling on steady arrivals of phutti and it is expected that the rates will show soft trend in the coming days due to the same reason.
The cotton production is good this year and it is most likely that the country may achieve 12 million bales but despite that it was observed that it may need to import some 1-2 million bales to meet the country requirements, analysts said.
During the last several sessions, it came under observation that foreign buyers are looking very much interested in the buying of local cotton due to high quality and cheaper rates as compared to the other cotton producing states, they said. The interesting question here is that how the mills will meet their requirements, if country's exports showed improvement?
According to our tradition, we sell our products at the cheaper rates and when we face shortage, import at the higher rate to meet our needs. Can we save our foreign exchange earnings? They asked. Besides, the ginners were not in favour of keeping stock with them for a long time, they were selling as much as they can in anticipation of increase in phutti arrivals in the near future, they said.
In the meantime, cotton industry analysts were of the view that there is deep uncertainty whether the pace of global economic recovery would boost fibre demand when a government crop report is handed out this week. The world economy 'is stabilising' but there are question marks whether the recovery would lead to a rise in cotton consumption, said Carl Anderson, an influential economist closely followed by the industry. The US Agriculture Department's monthly supply/demand report is due to be released on Friday.
On Thursday the NY cotton futures finished with small losses on sales by small speculators in featureless business as players waited for leads in the days ahead, brokers said. The December cotton contract fell 0.48 cent to conclude at 62.50 cents per lb, dealing from 62.30 to 63.44 cents. December contract volume reached 4,842 lots at 2:42 pm EDT (1842 GMT). March cotton shed 0.38 cent to settle at 64.97 cents, ranging between 64.87 and 65.79 cents.
The following deals were reported: 5000 bales of cotton from Shahdadpur sold at Rs 3450-3500, 4000 bales from Tando Adam at Rs 3475-3500, 3000 bales from Sanghar at Rs 3450-3500, 2000 bales from Nawabshah at Rs 3475-3500, 3000 bales from Mirpur Khas at Rs 3450-3475, 1500 bales from Hyderabad at Rs 3475, 600 bales from Hala at Rs 3475, 800 bales from Sarhari at Rs 3475-3500, 600 bales from Shahpur Chakker at Rs 3475-3500, 2000 bales from Rahim Yar Khan at Rs 3500, 3000 bales from Rajan Pur at Rs 3500, 400 bales from Hasil Pur at Rs 3475, 600 bales from Liaquat Pur at Rs 3475, 400 bales from Haroonabad at Rs 3490, 400 bales from Multan at Rs 3500, 600 bales from Burewala at Rs 3500, 500 bales from Gojra at Rs 3500, 400 bales from Vehari at Rs 3475, 600 bales from D G Khan at Rs 3475, 500 bales from Chistian at Rs 3450, 400 bales from Ali Pur at Rs 3450, 1000 bales from Bahawalnaggar at Rs 3475-3500, 600 bales from Sahiwal at Rs 3475 and 400 bales from Khanewal at Rs 3475.
===========================================================
The KCA Official Spot Rate for Local Dealings in Pak Rupees
-----------------------------------------------------------
FOR BASE GRADE 3 STAPLE LENGTH 1-1/32"
MICRONAIRE VALUE BETWEEN 3.8 TO 4.9 NCL
===========================================================
Rate Ex-Gin Upcountry Spot Rate Ex-Karachi
for Price Sales Tax @ 15%
===========================================================
37.324 Kgs 3,475.00 100 3,575.00
-----------------------------------------------------------
Equivalent
-----------------------------------------------------------
40 Kgs 3,724.00 100 3,824.00
===========================================================