Lack of buying interest among mills and spinners was again seen on the cotton market on Tuesday, dealers said. Official spot rate was unchanged at Rs 5,500, they added. In ready business only 600 bales of cotton changed hands between Rs 5300-5600, they said.
Market sources said that the ginners have unsold stock but the mills and exporters were not purchasing due to financial crisis locally and globally, as well. Until and unless uncertainties are over the world economies would not settle, the volume of business will not show any improvement in the near future, experts said.
There were no positive indications in the basic fundamentals, so the mills were on the sidelines and exporters were also looking disappointed under the circumstances as the world economic uplift is not visible in the coming days, they added. Leading economists felt that there are no good signs for the country's economy and growth in the coming days, economic growth will not pickup as long as the major issues such as electricity and fiscal deficits are addressed on war footing.
According to the Reuters, the NY cotton futures ended Monday near a three-year low for the second session running on investor sales, but the market trimmed its losses on consumer buying and signs that it was heavily oversold and due for a recovery, brokers said. "Nobody's got any confidence in the market," said Mike Stevens, an independent cotton analyst in Mandeville, Louisiana.
The euro gained as investors speculated that new action may be in the works to address the debt crisis and keep Greece from leaving the euro zone. The now benchmark December cotton contract on ICE Futures US fell 0.55 cent, or 0.8 percent, to close at 67.06 cents per lb, dealing between 64.61 and 67.95 cents. It was the lowest close for the third position cotton contract since early October 2009, Thomson Reuters data showed.
Spot July cotton eased 0.06 cent to finish at 68.53 cents a lb, moving from 66.10 to 69.06 cents. Volume on Monday reached almost 36,000 lots, almost 50 percent more than the 30-day norm, Thomson Reuters data showed. The following deals were reported: 200 bales of cotton from Vehari sold at Rs 5300, 300 bales from Arif Wala at the same rate and 100 more from Mailsi at Rs 5600.
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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 04.06.2012
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37.324 Kgs 5,500 130 5,630 5,630 NIL
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Equivalent
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40 Kgs 5,894 130 6,024 6,024 NIL
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