Official spot rate was higher on the cotton market on Wednesday amid hectic demand by the mills and exporters, dealers said. The Karachi Cotton Association (KCA) moved spot rate by Rs 300 to Rs 8,800. Seed cotton prices in Sindh and Punjab were nearly unchanged at Rs 4000-4,300, they said. In ready business, nearly 20,000 bales of cotton changed hands between Rs 8,800-9200, they added.
According to the market sources, mills were busy in forward buying amid apprehensions about to short crop. After the floods, experts are estimating 8.4 million bales of Phuti arrivals till November 30, instead of 10.4 million bales during the same period last year, they said. In the meantime growers have sold out their 80 percent stock and trying to sell the fresh stock according to their psychological levels, some analysts said.
On Tuesday the US cotton market closed higher on end-of-the-month investor short-covering as the market ended November well below the all-time highs hit earlier in the month, although analysts said market fundamentals remained bullish.
The key March cotton contract rose 1.58 cents to end at $1.1734 per lb, dealing from $1.1376 to $1.189. The contract was down 2.58 percent on the month, its biggest monthly decline since May, Thomson Reuters preliminary data showed. Spot December rose 3.72 cents to close at $1.2623, and ended the month up 0.77 percent. The price of cotton on ICE Futures US stormed to an all-time peak of $1.5723 per lb on November 10, up more than 115 percent since July as strong mill demand from China. Tight stocks and insatiable fund buying powered fiber contracts to their highest level since the US Civil War.
At the height of the rally cotton was up 95 percent year to date during the session on November 10, for the biggest gain of any commodity in the Reuters-Jefferies commodity index. Since then, silver has moved ahead of cotton as the strongest gainer in the index, up almost 66 percent in the year to date versus cotton's 55 percent. Cotton volume on Tuesday was light, with dealings of about 16,100 lots - nearly 60 percent below the 30-day average above 37,500 lots, Thomson Reuters data showed.
The following deals were reported: 1600 bales of cotton from Shahdad Pur sold at Rs 8800/8900, 200 bales of cotton from Sakrand at Rs 8900, 200 bales of cotton from Hala at Rs 8900, 1600 bales of cotton from Mir Pur Khas at Rs 8900/9000, 1000 bales of cotton from Tando Adam at Rs 8900, 1000 bales of cotton from Nawabshah at Rs 8900, 1200 bales of cotton from Khair Pur at Rs 9000, 1600 bales of cotton from Upper Sindh at Rs 9200, 400 bales of cotton from Vehari at Rs 8950, 200 bales of cotton from Layyah at Rs 9000, 800 bales of cotton from Khanewal at Rs 9000, 1000 bales of cotton from Rahim Yar Khan at Rs 9000, 1000 bales of cotton from Mian Channu at Rs 9000, 1200 bales of cotton from Chichawatni at Rs 9000, 400 bales of cotton from Rajan Pur at Rs 9000, 400 bales of cotton from Bakkhar at Rs 9000, 400 bales of cotton from Garh Mahraja at Rs 9000, 200 bales of cotton from Haroonabad at Rs 9000, 400 bales of cotton from Samandari at Rs 9000, 1400 bales of cotton from Burewala at Rs 9000, 400 bales of cotton from Fort Abbas at Rs 9000, 400 bales of cotton from Bahawal Nagar at Rs 9000, 400 Uch Sharif at Rs 9000, 1000 Bahawal Pur at Rs 9000, 1000 bales of cotton from Dera Ghazi Khan at Rs 9000, 400 bales of cotton from Tonsa Sharif at Rs 9000, 600 bales of cotton from Ali Pur at Rs 9100-9200, 200 bales of cotton from Shadan Lund at Rs 9200.
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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 30.11.2010
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37.324 Kgs 8,800 120 8,920 8,620 +300
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Equivalent
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40 Kgs 9,431 120 9,551 9,229 +322
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