Activity was down on the cotton market on Saturday as mills were not ready to pay above their psychological level, on the other hand, the ginners were not prepared to lower the prices due to short crop scenario, brokers said on Saturday.
The Karachi Cotton Association (KCA) spot rate was unchanged at Rs 9800, they said. In the meantime, seeds cotton prices in Sindh and Punjab were at Rs 3,900-4,550, they said. In ready business nearly, 5,500 bales of cotton changed hand between Rs 9,500-10,000, they added. Trading was slow on the cotton market as buyers were looking somewhat confused under the circumstances and trying to wait to see any positive development in the near future, experts said.
Sky-rocketing prices are causing slow business, they said adding that the ginners, in the meantime, increasing asking prices as phutti arrivals slow down. They said that unsold stock with the ginners are falling, indicating that prices may touch last year's record level at Rs 11,000 per maund. According to a report, the Ministry of Textile Industry had no legal instrument to stop through which mills and other parities from hoarding cotton and yarn.
On Friday the US cotton ended down about half percent after a relatively quiet session that capped a volatile week for the fibre. Benchmark March cotton contract on ICE Futures US closed down 0.62 cent, or 0.4 percent, at $1.4060 per lb. It moved in a three-cent band during the session, touching a low of $1.3961 and high of $1.4250.
Thursday's session was particularly volatile, with the March contract nearly rising by the four-cent trading limit only to fall as much later. For the week, March cotton fell three percent, its sharpest loss since late November. Analysts said prices rallied on speculative buying linked to talk of limited supplies coming into the New Year. They later dived on selling related to a re-balancing of cotton holdings by commodity indexes. Index funds will be paring risk from cotton and other overly-weighted agriculture markets and adding exposure to natural gas and crude oil under the re-balancing, which runs between this week and next.
The following deals were reported: 800 bales of cotton from Shahdad Pur sold at Rs 9600, 800 bales of cotton from Nawabshah at Rs 9600, 1000 bales from Khair Pur at Rs 9800, 4000 bales from Upper Sindh at Rs 9800-10000, 400 bales from Haroonabad at Rs 9500, 600 bales from Burewala at Rs 9700, 200 bales from Layyah at Rs 9700, 600 bales from Bakkhar at Rs 9700, 200 bales from Muhammad Pur at Rs 9800 and 500 bales from Rahim Yar Khan at Rs 10000.
===========================================================================
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 Spot Rate Difference
For Price Ex-Karachi Ex. KHI. As Ex-Karachi
on 07.01.2011
===========================================================================
37.324 Kgs 9,800 120 9,920 9,920 NIL
---------------------------------------------------------------------------
Equivalent
---------------------------------------------------------------------------
40 Kgs 10,503 120 10,623 10,623 NIL
===========================================================================