Prices may turn sharply higher on the cotton market on Friday on uncertainties about the supply, dealers said. The Karachi Cotton Association (KCA) official spot rate was inert at Rs 5,625, they said. In the ready business more than 3,000 bales of cotton changed hands between Rs 5540-5900. Phutti prices in both the Punjab and Sindh were at Rs 2100-2200, they added.
Some analysts said that when the ginners have only 1,50,000 bales of cotton, which is not enough for a few days, this is the dominating factor behind the price-flare up these days. Sharing the same opinion, another cotton expert, Naseem Usman said that the prices have already gone up and it looks that the rates may touch the new high as Pak cotton importers were facing hardship due to imposition of some conditions on the exporters of cotton by the neighbouring India.
He said that India wants to save its textile exports so it has taken precautionary measures ie, withdrawal of 7.5 percent rebate on cotton yarn and 1.5 percent subsidy on export of cotton, which will definitely ease the prices in the Indian local market.
India has exported above 5.2 million bales and 7.8 million bales have been registered to different countries, it is natural that if any country needs any thing, it has to save that, it will not export needed stuff, Naseem said. It happens that if any country exports its stuff already falling short later it raises hue and cry for no avail, other brokers said.
On Thursday the NY cotton futures reeled from investor sales to at a seven-week low as the firm dollar and weak outside markets deflated fibre contracts before release of a government crop report next day, brokers said. The key May cotton contract dove 2.38 cents to end at 78.60 cents a lb, trading from 78.48 to 81.50 cents.
It was the lowest finish on the spot continuation charts since February 18, according to Thomson Reuters data. Volume in the May contract hit 25,286 lots at 2:40 pm EDT (1840 GMT). July cotton lost 2.31 cents to finish at 79.88 cents and new-crop December shed 0.21 cent to close at 75.48 cents.
The following deals were reported: 200 bales of cotton from Sadiqabad sold at Rs 5700, 100 bales from Noau Abad at Rs 5640, 400 bales from Mailsi at Rs 5900 (one month CR), 500 bales from Mailsi at Rs 5800, 1000 bales from Ahmed Pur East at Rs 5900 (one month CR) and 900 bales from Rahim Yar Khan at Rs 5700, 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 5,625.00 100 5,725.00
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Equivalent
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40 Kgs 6,028.00 100 6,128.00
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