Modest trading activity was seen on the cotton market on Thursday as exporters showed interest in buying to meet their needs, dealers said. The official spot rate resisted further decline, restaining overnight levels at Rs 6,400, 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, over 3000 bales of cotton changed hands between Rs 5850-6375, dealers said.
As a result of world recession, the entire cotton sector is disturbed due to facing a lot of losses, experts said. According to reports, the Punjab textile units started downsizing, which caused unemployment as several spinners and weavers cut down or closed down amid mounting losses because of shortage of gas supply, load-shedding and sharp appreciation of the rupee, they said.
Commenting on the sluggish business activity these days, some experts said that textile exporters were worried about the falling trend in exporter and attributed the decline to un-even exchange rate policy. They said that India has already taken a lot of benefits by exporting cotton to importing countries, if the government does not come forward to rescue, it will caused a huge burden for country's exporters.
On the other hand, interesting factor, which appeared recently that the appreciation in the rupee is lowering the International Monetary Fund's (IMF) loans and it is also expected that foreign exchange reserves may hit 15 billion dollars by the end of September 2014, they said. Many cotton growers were planning to shift from cotton to another crop, which could be beneficial for them, they added. The Economic Cotton Committee (ECC) has decided to withdraw SRO which exempted cotton yarn import from custom duty of five percent.
Reuters adds: Cotton futures rallied on Wednesday, recovering the previous day's losses, as dry weather across major growing regions of Texas renewed US supply worries. The most-active July cotton contract on ICE Futures US rose 1.28 cent, or 1.4 percent, to settle at 92.57 cents a lb, while the spot May contract closed up 1.12 cents, or 1.2 percent, at 91.04 cents a lb. Clear skies over Texas, the top-producing US state, ignited fresh buying as traders worried about crop damage from protracted dry conditions.
The following deals were reported: 2600 bales of cotton from Rohri at Rs 5900, 200 bales from Dharki at Rs 6325, 500 bales from Chundkor at Rs 6375 and 200 bales of cotton from Chichawatni sold at Rs 5850, 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 16.04.2014
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37.324 Kgs 6,400 155 6,555 6,655 NIL
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Equivalent
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40 Kgs 6,859 155 7,014 7,014 NIL
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