Prices maintained upward trend on the cotton market on Tuesday amid strong demand and persisting rise in the rates, dealers said. Karachi Cotton Association (KCA) official spot rate was unchanged at Rs 11,500, they said. Phutti prices in Sindh and Punjab were unmoved at Rs 4300-5500, they said.
In the ready business approximately 11,000 bales of cotton changed hands including a deal at Rs 13000 on credit, they added. Rates are still on surge in sympathy with the international track and it is very much visible that the prices may continue its present trend due to short supply and strong demand, some analysts said.
They attributed the increase to lower-than-expected crop due to floods in the country, bad weather caused short crop in China and Australia and speculative buying in the NY market. According to a report, more of Australia's summer cotton crop could be at risk as floodwaters caused by heavy rains flow to southern planting regions, the government's commodities forecaster said on Tuesday.
The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) already estimates that 7 percent of Australia's 2010/11 cotton plantings were destroyed by heavy rains and floods during December and early January and between 15 and 20 percent of the plantings were damaged by the weather.
Besides, the US Agriculture Department (USDA) iS likely to leave world cotton demand unchanged in its monthly crop report on Wednesday, taking a conservative approach before concluding that record high prices will curb consumption, analysts said.
On Monday the US cotton futures settled sharply higher on speculative and option-related buying as players piled back into the market, threatening to ignite a fresh rally to record territory, analysts said. Cotton futures soared last week to their highest in almost 150 years, but then on Thursday endured their biggest one-day fall since early December, Thomson Reuters data showed. Year-to-date, cotton is up almost 16 percent.
The key March cotton contract on ICE Futures US rose 6.65 cents or almost 4.0 percent to end at $1.7451 per lb, dealing from $1.6476 to $1.7486, a level representing the top of the 7-cent allowable daily limit. Total volume reached some 33,300 lots, almost 60 percent above the 30-day norm, Thomson Reuters preliminary data showed.
The following deals were reported: 1150 bales of cotton from Mirpur Khas sold at Rs 10400, 600 bales of cotton from Upper Sindh at Rs 11650, 1200 bales from Faqir wali at Rs 10400, 600 bales from Vehari at Rs 11500, 900 bales from Bahawal Pur at Rs 11000, 1000 bales from Shujabad at Rs 11000, 400 bales from Rahim Yar Khan at Rs 11500, 1600 bales from Rahim Yar Khan at Rs 13000, (Credit), 200 bales from Shadan Lund at Rs 11600, 600 bales from Layyah at Rs 11700, 400 bales from Ahmed Pur at Rs 11800, 200 bales from Ghazi Ghat at Rs 11800, 400 bales from Rajan Pur at Rs 11900, 400 bales from Dera Ghazi Khan at Rs 12000, 400 bales from Fazil Pur at Rs 12000 and 600 bales from Rajan Pur at Rs 12000.
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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 07.02.2011
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37.324 Kgs 11,500 120 11,620 11,620 NIL
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Equivalent
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40 Kgs 12,325 120 12,445 12,445 NIL
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