Cautious attitude of the growers helped the prices to recover slightly on the cotton market on Tuesday in process of hectic activity by mills and spinners, dealers said The Karachi Cotton Association (KCA) official spot rate was dropped by Rs 200 to Rs 5000, they said.
In Sindh and Punjab rates showed slight recovery, they said. In Sindh, the seed-cotton prices were up by Rs 200 to Rs 2300-2400. Similarly, in Punjab, prices gained Rs 100 to Rs 2200-2300, they said. In the ready business, approximately, 16,000 bales of cotton changed hands between Rs 4,650-5,100, dealers added. Commenting on the fresh rebound in prices in the ready business, some experts said that this is just starting of season so some of the leading growers are not in hurry. they prefer to hold back the stock to observe the developments.
Expectations are good for the current crop because phutti arrivals are in process and some parts of cotton growing areas also received rains, which are good for the crop, they said. "To get the desired target of 15 million bales, we have to pray for the favourable weather", they said.
Mills are purchasing cotton as prices were matching with their psychological levels, but it is most likely that if demand emerges from exporters or weather condition turn unfavourable, these factors may cause sharp recovery in the rates, they said. On Monday the NY cotton futures ended easier on investor sales as a lack of leads and the negative mood brought on by the US debt crisis conspired to keep fibre contracts on the defensive, analysts said.
The key December cotton futures on ICE Futures US fell 1.88 cents to end at 96.76 cents per lb, trading from 95.13 to 98.99 cents. It was the lowest close for the second-position contract since mid-September 2010, Thomson Reuters data showed. Business was light. Total market volume hit around 8,000 lots at 2:46 pm EDT (1746 GMT), potentially the lowest since May 23 and over 50 percent below the 30-day norm, Thomson Reuters preliminary data showed.
The following deals were reported: 600 bales of cotton from Sultanabad sold at Rs 4650-4700, 1000 bales from Mir Pur Khas at Rs 4700-4800, 1000 bales from Shahdad Pur at Rs 4700-4800, 800 bales from Sanghar at Rs 4700-4800, 800 bales from Tando Adam at Rs 4800, 600 bales from Hyderabad at Rs 4700-4800, 400 bales from Burewala at Rs 4800, 400 bales from Multan at Rs 4800-4900, 800 bales from Haroonabad at Rs 4800-4900, 600 bales from Bahawal Nagar at Rs 4700-4800, 400 bales from Mailsi at Rs 4900, 400 bales from Mongi Bangla at Rs 4900, 500 bales from Garmaraja at Rs 4900, 200 bales from Dunia Pur at Rs 4900, 600 bales from Vehari at Rs 4900-5100, 400 bales from Hasil Pur at Rs 4800-5100, 600 bales from Depal Pur at Rs 4800-4900, 200 bales from Okara at Rs 4800, 800 bales from Khanewal at Rs 4900-5050, 500 bales from Kabirwala at Rs 4900-5000 and 1000 bales from Gojra at Rs 4900-5100.
===========================================================================
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 25.07.2011
===========================================================================
37.324 Kgs 5,000 120 5,120 5,320 -200
---------------------------------------------------------------------------
Equivalent
---------------------------------------------------------------------------
40 Kgs 5,358 120 5,478 5,693 -215
===========================================================================