Cottonseed: prices soar on increased demand and reduced supply

Cotton seed

October 18, 2012: Phutti prices maintained upward march on the cotton market on Wednesday owing to strong demand by mills and spinners amid tight supply, experts said. Official spot rate was higher by Rs 100 to Rs 5,650, they said. In the ready business, approximately, 22,000 bales of cotton changed hands between Rs 5450-5900, they said. In both the Punjab and Sindh prices of seed cotton went up by Rs 100-50 to Rs 2500-2800, they said.

Commenting on the latest development in the cotton arena, cotton analyst Naseem Usman said that the phutti supply was tight due to quality factor. Sharing the same views, a leading phutti grower, Shanker said that the monsoon rain were good for the crop but now it appeared that rains effected both the quality and quantity in some cotton growing areas, particularly in Sindh, creating short supply.

Some experts said that rates came down on weak demand by the international market, since world recession started pressure on prices persisted. Demand is not picking up from importing countries, particularly a decline in demand from China, is still dismal sign for the cotton exporting countries. China, the world’s largest consumer, is likely to cut imports to trim bulging local stocks. Lacklustre buying by importers due to softening global prices is also putting pressure on local prices, they said.

In the international market, usually, prices have been falling sharply on waning world demand and an expected rise in global output, they said. During last days, the December cotton contract in New York is down about 20 percent since April 1, when farmers in the United States started planting. According to the Reuters, the US cotton jumped nearly 4 percent on Tuesday in its biggest one-day rally in more than two months as traders chased prices up on worries about the quality of fibre that the market will be seeing in the near term.

Cotton’s most actively traded contract on ICE Futures US, December, settled at 74.86 cents a pound, gaining 3.5 percent on the day in heavy trading. Thomson Reuters data showed volumes in ICE cotton at above 54,000 lots by 3:30 pm EDT (1930 GMT), some 220 percent higher than the 30-day norm.

The following deals reported: 800 bales on cotton from Shahdad Pur at Rs 5600-5650, 800 bales from Tando Adam at Rs 5600-5650, 1000 bales from Sanghar at Rs 5600, 1000 bales from Mir Pur Khas at Rs 5600-5650, 3000 bales from Khair Pur at Rs 5800-5900, 1000 bales from Upper Sindh at Rs 5800-5900, 200 bales from Uch Sharif at Rs 5450, 200 bales from Pir Mahal at Rs 5450, 800 bales from Khanewal at Rs 5550-5700, 200 bales from Bahawal Pur at Rs 5550, 200 bales from Chichawatni at Rs 5600, 400 bales from Dera Ghazi Khan at Rs 5600, 1400 bales from Burewala at Rs 5600-5700, 800 bales from Bahawal Nagar at Rs 5600-5700, 400 bales from Chistian at Rs 5600, 200 bales from Bakkhar at Rs 5600, 200 bales from Layyah at Rs 5600, 400 bales from Hasil Pur at Rs 5600, 600 bales from Rahim Yar Khan at Rs 5650-5800, 1800 bales from Haroonabad at Rs 5700-5800, 400 bales from Mian Chano at Rs 5700, 400 bales from Jalal Pur at Rs 5700, 1200 bales from Faqir Wali at Rs 5800, 1000 bales from Fazil Pur at Rs 5800, 1600 bales from Fort Abbas at Rs 5800, 200 bales from Mian Wali at Rs 5850 and 1800 bales from Rajan Pur at Rs 5800-5900, 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-Karachion 16.10.2012
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37.324 Kgs          5,650      155          5,805        5,705         +100
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Equivalent
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40 Kgs              6,055      155          6,210        6,103          +54
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Courtesy: BR

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