Business activity came down on the cotton market on Wednesday as some leading buyers kept on the sidelines owing to higher prices, dealers said. The Karachi Cotton Association (KCA) official spot rate was inert at Rs 7350, they said. In the ready business, nearly 26,000 bales of cotton changed hands between Rs 7300-7500, they said.
Seed cotton prices in Sindh were unchanged at Rs 3250-3300, in the Punjab prices dropped by Rs 50-100 at Rs 3100-3300, they added. Commenting on the obtaining price trend , some economists said that NY cotton market was volatile as a result of decline after sharp gain, so the cotton traders were sidelined to observe the current development.
The local prices are tracing the NY cotton futures, since the US cotton market started breaking records but now it looks that the prices may show softness in the local market in the near future, they said. In order to keep a balance in the market, the government has to take pre-cautionary measures. Because it was noted that in exports, the textile sector could not surge only on the back of rising prices locally and causing a significant increase in the foreign exchange, as well, they said.
Depreciation in the value of the rupee versus dollar also is also basic factor behind the upward trend in the textile exports, they added. According to reports, cotton production is good during the current season in India and it allowed exporting the commodity but if it backs out from the deals to export cotton to Pak counterparts, it would hurt the business sentiments locally, they said.
On Tuesday the NY cotton futures closed lower on mild investor profit-taking after scaling a fresh 15-year high, with analysts saying the market's recent momentum may lead to a shot at record highs. ICE Futures US key December cotton contract fell 0.92 cent to close at $1.0958 per lb. The contract touched a session and 15-year top at $1.1238 hit during overnight. Volume traded in the market stood at an estimated 21,339 lots at 2:38 pm EDT (1838 GMT), some 7.0 percent above the 30-day average at 19,991 lots, Thomson Reuters preliminary data showed.
The following deals were reported: 2000 bales of cotton from Nawabshah sold at Rs 7400, 2000 bales of cotton from Tando Adam at Rs 7450-7500, 3000 bales of cotton from SDU at Rs 7400, 2200 bales of cotton from Mirpurkhas at Rs 7400-7450, 1000 bales of cotton from Sanghar at Rs 7325-7350, 2000 bales of cotton from Khairpur at Rs 7400-7450, 3000 bales of cotton from Upper Sindh at Rs 7500, 600 bales of cotton from Mian wali at Rs 7500, ?1000 bales of cotton from Chichawatni at Rs 7300-7350, 1200 bales of cotton from Mian Channu at Rs 7300-7350, 1000 bales of cotton from at Rs Khanewal at Rs 7350-7400, 3000 bales of cotton from Burewala at Rs 7325-7350, 800 bales of cotton from Bahawal Nagar at Rs 7350, 1200 bales of cotton from Haroonabad at Rs 7300, 1000 bales of cotton from Bhawal Pur at Rs 7300-7350, 1000 bales of cotton from Sahiwal at Rs 7300-7350.
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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"
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MICRONAIRE VALUE BETWEEN 3.8 TO 4.9 NCL
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Rate Ex-Gin Upcountry Spot Rate Spot Rate Difference
For Price Ex-Karachi Ex. KHI. As Ex-Karachi
on 12.10.2010
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37.324 Kgs 7,350 120 7,470 7,470 NIL
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Equivalent
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40 Kgs 7,877 120 7,997 7,997 NIL
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