Drastic cut was seen in ready and the spot rate on the cotton market on Saturday in a single session, thus, since the week started, the rates fell by Rs 2000 to Rs 5300, dealers said. The Karachi Cotton Association (KCA) official spot rate was brought down sharply by Rs 700 to Rs 6,000, they said.
In the ready business, about 3,400 bales of cotton changed hands between Rs 5300-6300, showing a decline of Rs 400 amid rising trend in phutti arrivals, they said. Phutti prices in both Sindh and Punjab also came down sharply at Rs 2400-2500 and at Rs 2500-2600, respectively, they said. According to the market sources, prices came down steeply as picking operations accelerated after the recent rains. Cotton prices touched the high at Rs 7500 and slipped to Rs 5300, they said.
Other reason behind the fall is ginners' unnerved attitude because they were selling in a frantic mood, even they are not bargaining and the mills on the other hand were availing full advantage of opportunity, they said. Sharing the same view, Naseem Usman said that under the circumstance, when the free-fall continues, the situation may worsen if the government extends the time period of the Regulatory Duty on the exports of cotton yarn.
On Friday the cotton futures edged up to a firm close on investor buying as the market consolidated, and brokers said the next move depends on outside markets. The key December cotton contract added 0.49 cent to close at 73.96 cents per lb, trading between 73.13 and 74.25 cents. It was an inside day as the contract stayed within Thursday's 73.06 to 74.29 band. On the week, December was down 1.37 percent from its Friday close at 74.99 cents. Volume traded in the December contract stood at 8,465 lots at 2:38 pm EDT (1838 GMT).
The following deals were reported: 200 bales of cotton from Sanghar sold at Rs 5300, 200 bales from Hyderabad at Rs 6300, 200 bales from Shadadpur at Rs 6200, 200 bales from Sanghar at Rs 6100, 600 bales from Tando Adam at Rs 6000 (1st week of August), 200 bales from Shahdadpur at Rs 6000, 200 bales from Tando Adam at Rs 5700, 200 bales from Sultanabad at Rs 5700, 200 bales from Sultanabad at Rs 5600, 400 bales from Burewala at Rs 6200, 200 bales from Chichawatni at Rs 6200, 200 bales from Tandalawali at Rs 6100, 200 bales from Sahiwal at Rs 6100, 200 bales from Burewala at Rs 6000 and 200 bales from Pak Pattan at Rs 6000.
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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 6,000.00 100 6,100.00
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Equivalent
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40 Kgs 6,430.00 100 6,530.00
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