Spot rate failed to retain its gains after fresh decline in the NY cotton market, dealers said on the cotton market on Wednesday. The official spot rate was lower by Rs 50 to Rs 5,300, they said. Prices of seedcotton in Sindh were at Rs 1900-2300 and in the Punjab rates were at Rs 2000-2650, they said. In ready dealings, around 7000 bales of cotton changed hands at Rs 3900-5700, they said.
Naseem Usman said that on Tuesday trading activity and prices improved following the Indian ban on cotton exports, but it looks that prices may not maintain present pace in the near future due to weak economy world-wide. The world's leading experts were guessing that pace of price rise may not continue due to falling demand by buyers, other brokers said.
The local mills were facing financial problems as a result of losing foreign orders due to world recession, analysts said. Commenting on the present developments, other experts said that after facing opposition on export ban issue by the cotton traders India government may allow limited exports of cotton to cover existing sales commitments. To discuss issue, Indian ministers to meet on Friday, in the meantime, the exporters sought permission for 2.5 million bales to be released.
Contracts for about 2.5 million bales are already registered and awaiting shipment and government sources said some compromise might be reached on these. Local brokers said that they said that how much quantity could be allowed in the meeting, they don't know but Indian cotton exporters were hoping the entire 2.5 million bales already registered would be permitted, in order to avoid defaults.
On Tuesday, in the NY the cotton futures ended lower as investors were prompted by a firm dollar and weak outside markets to take profits from the previous session's spike, even as uncertainty about a cotton export ban by India minimised losses, analysts said.
The benchmark May cotton contract on ICE Futures US fell 0.81 cent to settle at 91.42 cents per lb, having traded between 90.77 and 94.24 cents. On Monday, the benchmark fibre contract jumped its 4-cent daily limit to close at 92.23 cents per lb, its biggest one day move in a month. Tuesday's volume of around 32,000 lots was about 10 percent below its 30-day norm, Thomson Reuters preliminary data showed, adds Reuters.
The following deals were reported: 400 bales of cotton from Shahdad Pur sold at Rs 3900, 400 bales from Sanghar at Rs 4000, 200 bales from Hala at Rs 4300, 200 bales from Mian Chano at Rs 4100, 200 bales from Khanewal at Rs 4900, 200 bales from Marot at Rs 5000, 400 bales of cotton from Hasil Pur at Rs 5000-5200, 400 bales from Pak Pattan at Rs 5100, 200 bales from Qaboola at Rs 5100, 200 bales from Gojra at Rs 5200, 600 bales from Haroonabad at Rs 5100-5300, 200 bales from Vehari at Rs 5225, 400 bales from Jalal Pur at Rs 5300, 400 bales from Lodhran at Rs 5350, 200 bales from Chichawatni at Rs 5350, 400 bales from Sadiqabad at Rs 5600, 1400 bales from Rahim Yar Khan at Rs 5600-5700 and 400 bales from Mian Wali at Rs 5700, they said.
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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 06.03.2012
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37.324 Kgs 5,300 130 5,430 5,480 +50
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Equivalent
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40 Kgs 5,680 130 5,810 5,864 +54
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