KCA official spot rate was raised sharply by Rs 150, and phutti of new crop also went up on the cotton market on Saturday amid mills' cautious buying, dealers said. The Karachi Cotton Association (KCA) official spot rate shot up, gaining Rs 150 at Rs 8,650, they said.
Upward trend continued in the new crop as in Sindh prices of new Phutti was higher by Rs 100 to Rs 3950 and in Punjab rates were up by Rs 100 to Rs 4000-4100, they said. In ready business, trading came down as a result of rise in the asking prices by the ginners, nearly 2000 bales of cotton changed hands between Rs 8500-8850, they added.
Prices maintained an upward trend as ginners were not ready to sell cotton at the cheaper rate, with the passage of time, they are raising the asking prices and mills were unable to meet the demand, experts said. The ginners are trying to keep themselves in the positive territory by gaining profits as much as they can because reports are showing that the world cotton production is good in the next season, which is giving an impression that they may lose their profit, they added.
Many in the market are of the view that local cotton prices are higher and may not maintain the present pace due to better production with improved quality, they said. One of the cotton producing country, Cameroon's raw cotton production rose 47 percent to 161,900 tonnes during the 2010-11 season and could increase further to 200,000 tonnes this year, according to state firm SODECOTTON, which attributed the boost to new high-yield plant varieties.
Besides, Westpac Banking Corp said in a crop outlook on Friday that Australia's 2010/11 cotton harvest is likely to be completed by the end of June even though recent rain has slowed harvesting,.Australia, the world's third largest cotton exporter is expected to ship record quantities of the fibre in the coming year. On Friday the US cotton futures posted their first positive close in four sessions, rallying more than two percent as recent pressure from a short squeeze in front-month July eased as the contract went into delivery.
The July contract rallied more than 14 percent in the last week. On Wednesday, it hit its highest level since June 6 as players holding on to short positions scrambled to cover in front of the start of the contract's delivery period Friday.
"July was up earlier today because we had a strong taker in the July contract," said Sharon Johnson, senior cotton analyst with commodities brokerage Pension Futures, referring to delivery notice data that showed 455 of the 459 notices were stopped out by one company.
"When you get 99.9 percent of the delivery, you have 99.9 percent of the open interest. With open interest this morning at 2801 lots, 99.9 percent of that is in the hands of Allenburg. The spot July cotton contract on ICE Futures US edged up 0.67 cent to finish at $1.6522 per lb. The key December contract rallied 2.52 cents or 2.1 percent to end at $1.2192 per lb, dealing from $1.1960 to $1.2274.
The following deals were reported: 200 sales of cotton sold at Rs 8800 (mill to mill), 200 bales from Shujabad at Rs 8600, 200 bales from Bhawal Pur at Rs 8500, 200 bales from Vehari at Rs 8900, 400 bales from Khan Pur at Rs 8600, 400 bales from Khan Pur at Rs 8800 and 100 bales from Haroonabad at Rs 8850.
===========================================================================
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 24.06.2011
===========================================================================
37.324 Kgs 8,650 120 8,770 8,620 +150
---------------------------------------------------------------------------
Equivalent
---------------------------------------------------------------------------
40 Kgs 9,270 120 9,390 9,229 +161
===========================================================================