Prices drifted lower on the cotton market on Thursday as leading mills and some exporters stayed on the sidelines in modest trading, dealers said. The official spot rate was down by Rs 50 to Rs 6,500, they added. Prices of seed cotton in Sindh and Punjab per 40 kg were unchanged at Rs 2800 and Rs 3100, dealers said.
In the ready session, around 5000 bales of cotton changed hands between Rs 5400-6600, dealers said. According to the market sources, some major buyers were not interested in the fresh deals mainly because of waiting for further decline in the rates. Exporters followed same path, cotton analyst, Naseem Usman said and adding that the spinners were upset with the huge unsold stocks of cotton yarn. Other experts shared the same views and said that availability of cheap Indian cotton yarn in the local market falling with the passage of time due to appreciation in the value of the Indian rupee versus the dollar.
Earlier, India has sold nearly 50 percent cotton yarn to China and local spinners could not sell out their stuff and facing financial losses, they said. The government is making hard efforts to bring the economy on track, it must make a strategy, which protest domestic industry as the cotton growers and ginners, they said.
Reuters adds: Cotton futures fell over 1 percent on Wednesday as investors booked profits after the US Agriculture Department (USDA) reduced its outlook for US 2013-14 supplies, in line with expectations in its monthly report. The most-active May cotton contract on ICE Futures US was down 0.93 percent at 91.55 cents per lb at 12:32 pm EDT (1632 GMT). It had been down over 1 percent at 91.48 cents.
In its monthly crop report, the USDA cut its forecast for inventory by 200,000 480-lb bales to 2.5 million, the lowest since 1990/91. The following deals were reported: 1100 bales of cotton from Sui Gas at Rs 5400, 558 bales from Ghotki at Rs 6200, 100 bales from same station at Rs 6100, 200 bales from Rohri at Rs 5850, 400 bales from Karampur at Rs 6500, 1400 bales from Khanpur at Rs 6600 and 1000 bales from Rahim Yar Khan at Rs 6500, 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 09.04.2014
===========================================================================
37.324 Kgs 6,500 155 6,655 6,705 -50
---------------------------------------------------------------------------
Equivalent
---------------------------------------------------------------------------
40 Kgs 6,966 155 7,121 7,175 -54
===========================================================================