Prices maintained a firm posture on the cotton market on Saturday in the process of modest trade, dealers said. The official spot rate was unchanged at Rs 5,250, dealers said. In Sindh, seed cotton prices were at Rs 2000 and Rs 2900 and in the Punjab, rates were at Rs 2000 and Rs 3000, they said.
In the ready business, over 11,000 bales of cotton finalised between Rs 4900 and Rs 5600, they said. Market sources said that in the absence of motivating factors, the buyers did urgent buying. Cotton analyst, Naseem Usman said that as a whole the world is facing recession and this factor is hitting hard economic activities in the country.
According to the reports, China, the world's top cotton consumer, will produce 5.6 million tonnes of the fibre in 2015, down 9.3 percent from the previous year, said the National Bureau of Statistics, blaming the decline on a drop in planted acreage for this year's crop. The figure is higher than recent trade estimates, many of which put this year's cotton output at less than 5 million tonnes after poor summer weather pulled down yields.
Reuters adds: Cotton futures snapped a six-day streak of declines on Friday to post their largest single-session gains in two weeks and finish the week little-changed, with the day's gains attributed to a quick flurry of buying amid options expiry.
Prices spiked at 1:30 pm EDT (1830 GMT) after holding near unchanged for most of the session, which traders said was likely due to market participants squaring positions by buying futures as cotton options expired Friday. "It was a flash in the pan connected to the options expiration," said Peter Egli, director of risk management for British merchant Plexus Cotton.
US cotton research firm Cotton Outlook slashed its estimates for world production and ending stocks on Friday morning. March cotton on ICE Futures US settled up 0.70 cent, or 1.11 percent, at 63.69 cents per lb. It traded within a range of 62.95 and 63.93 cents a lb. Prices closed the week down 0.02 cent, or less than 0.1 percent Total futures market volume rose by 456 to 16,257 lots. Data showed total open interest fell 1,636 to 189,439 contracts in the previous session.
The following deals reported, 1100 bales from Rassolabad sold at Rs 5445, 200 bales from Mirpur Mathelo at Rs 5550, 400 bales from Ghotki at the same level, 1800 bales from Bakhar at Rs 4900-5100, 600 bales from Faqirwali at Rs 5150, 400 bales from Chistian at the same rate, 1600 bales from Fort Abbas at Rs 5200-5325, 400 bales from Hasilpur at Rs 5450, 600 bales from Khanpur at Rs 5550, 2000 bales from Rahim Yar Khan at Rs 5600 and same figure from Sadiqabad done at the same price, dealers said.
===========================================================================
The KCA Official Spot Rate for Local Dealings in Pakistan 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 18.12.2015
===========================================================================
37.324 kg 5,250 135 5,385 5,385 NIL
---------------------------------------------------------------------------
Equivalent
---------------------------------------------------------------------------
40 kgs 5,626 145 5,771 5,771 NIL
===========================================================================