Most of the leading participants kept on the sidelines amid pre-holiday session on the cotton market on Thursday, dealers said. Official spot rate was unchanged at Rs 5,650, they said. In the ready business, nearly, 2,000 bales of cotton changed hands between Rs 5650-5700, they said. In both the Punjab and Sindh, the prices of seeds cotton were at Rs 2400-2700, they said.
Prices showed slight fluctuations amid thin attendance by the mills, cotton analyst Naseem Usman said and adding that the growers were still hoping for better return in the post-holiday sessions. In the meantime, it is most likely that the prices may not fluctuate sharply in days to come, he added. Other brokers said that huge stock of unsold stock may not allow them to hold unsold cotton for the long time. Prices were soft in the in the globe after a fall of 2.2 percent in the NY cotton futures, other experts said.
According to the Reuters, the US cotton futures sank 2.2 percent on Wednesday, as technical selling accelerated after the market pierced its 100-day moving average, with the market giving up all the ground it gained last week. Falling for a second day, the most-actively traded December cotton contract on ICE Futures US settled at 72.67 cents per lb, down 2.2 percent.
A late flurry of buying helped prices move off their intraday low of 72.06 cents, but prices have fallen over 8 percent since peaking at five-month highs just below 80 cents last Thursday. The market may find support at 72.22 cents in the short term, but the bearish outlook, with analysts expecting record crops and falling demand, may still send prices through the psychologically key 70-cent mark.
Trading the December-March spread dominated much of the over 28,000 lots that changed hands on the day. The backwardation, with nearby prices above March, narrowed to just 0.15 cent after the heavy selling into December. The March contract fell almost 2 percent to 72.52 cents. The following deals reported: 400 bales of cotton from Bahawalpur at Rs 5650, 400 bales from Bakhar at Rs 5700 and same figure from Burewala at the same rate, 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 24.10.2012
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37.324 Kgs 5,650 155 5,805 5,805 NIL
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Equivalent
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40 Kgs 6,055 155 6,210 6,210 NIL
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