Prices soared on the cotton market on Monday at Rs 7,500 as the ginners have raised asking prices due to sharp fall in supply position, dealers said. The official spot rate held the overnight level at Rs 6,800, they said. Rates of seed cotton in Sindh were inert at Rs 2,400-3,100 and in Punjab prices were inert at 2,300-3,340, they said. In the ready business, over 3,000 bales of cotton changed hands between Rs 6,200 and Rs 7,500, they said.
Commenting on the steep rise in the rates, cotton analyst Naseem Usman said that supply was so short that exporters of the textile products had to import cotton from other countries, cotton production was not enough to meet their demand, at least fine type was not available on the local market despite higher rates, they said.
The Pakistan Cotton Ginners Association (PCGA) issued phutti arrivals figure till March 15, at 12.8 million bales, which is short of demand by the exporters, they said. Proper demand for cotton yarn from China and India's expected ban on export pushing up cotton rates but it is likely in the near future, they said.
The country is likely to achieve 13.3 million bales that year, other experts said. Persisting increase in rates in the international market causing a rise in the local market, they said. According to Reuters, cotton prices surged on Friday, reaching the highest level in nearly a year, on fund buying and short-covering amid expectations that number one textile market China will continue buying even as prices rally.
The most-active May cotton contract on ICE Futures US closed up 1.64 cents, or 1.8 percent, at 92.50 cents per pound. Earlier, it climbed as high as 93.93 cents, the highest price for the spot contract since late March 2012. China, the world's largest fibre consumer, is expected to issue extra import quotas to struggling textile mills, lifting hopes of continued robust demand, even in the face of a more than 20-percent spike in prices since the start of the year.
The following deals were reported: 400 bales of cotton from Ghotki at Rs 6,600, 105 bales from Chichawatni at Rs 6,225, 100 bales from Multan at Rs 6,450, 200 bales from Fort Abbas at Rs 6,600, 400 bales from Mian Wali at Rs 6,675, 400 baless from Rajan Pur at Rs 7,100, same figure from Jhang at Rs 7,200, 600 bales from Hasil pur (conditional) and same number from Shujaabad (conditional) at Rs 7,500, they said.
===========================================================================
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 16.03.2013
===========================================================================
37.324 Kgs 6,800 155 6,955 6,955 NIL
---------------------------------------------------------------------------
Equivalent
---------------------------------------------------------------------------
40 Kgs 7,288 155 7,443 7,443 NIL
===========================================================================