Fresh buying interest emerges on strong dollar: Cotton Market

December 14, 2012


Cotton Bales

Mills fresh buying interest emerged as dollar is becoming dearer among exporters due to sharp gain versus the rupee, dealers said on the cotton market on Thursday. Official spot rate was unchanged at Rs 5,850, they said. Over, 20,000 bales of cotton finalised between Rs 5800 and Rs 6100, they said. Prices of seedcotton (phutti) were unchanged in Sindh at Rs 2400-2750 and in Punjab, rates were showed no change at Rs 2500-2800, they said.

Market sources said that on the one hand, mills buying interest may increase in the coming days as a result of higher dollar, since the month started, they said that the rupee lost nearly 80 paisa at 97.40 in the interbank market and the national currency also shed 60 paisa in the open market at 98, now what is new barrier? They said that the rupee face more devaluation if forward buying not come in the coming days. On the other hand, trading activity likely to improve as 11-day strike called off by goods transporters. Country lost approximately, 1 billion dollars worth of exports during that period, some experts said.

Cotton analyst, Naseem Usman said that expectations for a rate cut is also giving a boost to the business activity, stock market is gaining ground, which is a very positive sign under the circumstances, they said. According to the Reuters, the US cotton prices firmed again on Wednesday as speculative investors placed fresh bets on higher prices after the fibers market broke above a short-term trend line following Tuesday’s US Department of Agriculture crop report.

New speculative buying pushed prices up 0.84 percent to 75.53 cents per lb, their highest level since October 23, just before closing. That extended the 2 percent rise seen a day earlier. Easing off earlier highs, the most-active March contract on ICE Futures US settled up 0.22 cent, or 0.30 percent, at 75.12 cents per lb. Exchange data showed investors took on new long positions on Tuesday – with open interest, a reflection of outstanding contracts, jumping 2,000 lots, the biggest daily increase in almost two months, to 164,076 lots. This is the first meaningful increase in liquidity since it fell by almost a quarter from 208,000 lots on October 29.

The following deals were reported: 600 bales of cotton from Khairpur at Rs 5925, 3000 bales from Upper Sindh at Rs 5975, 400 bales from Multan at Rs 5800, 400 bales from Mian Chano at Rs 5800, 200 bales from Daran Wala at Rs 5820, 400 bales from Burewala at Rs 5830-5850, 200 bales from Chichawatni at Rs 5850, 200 bales from Madrassa at Rs 5850, 200 bales from Garhamor at Rs 5850, 200 bales from Jahanian at Rs 5850, 400 bales from Arifwala at Rs 5850, 200 bales from Miubarik Pur at Rs 5850, 400 bales from Khichiwala at Rs 5850, 200 bales from Faqirwali at Rs 5850, 200 bales from Hasilpur at Rs 5850, 200 bales from Pak Pattan at Rs 5900, 600 bales from Liaquatpur at Rs 5900, 1000 bales from Khanewal at Rs 5900/5950, 400 bales from Bakkhar at Rs 5925, 3000 bales from Rahimyar Khan at Rs 5950, 400 bales from Dera Ghazi Khan at Rs 5950, 800 bales from Sadiqabad at Rs 5950/6000, 200 Shadan Lund at Rs 5975, 1000 bales from Alipur at Rs 6000, 800 bales from Mohammadpur at Rs 6000, 400 bales from Rajanpur at Rs 6000, 600 bales from Shahpur at Rs 6000, 400 bales from Shah Jamal at Rs 6000, 2000 bales from Mianwali at Rs 6000-6100 and 600 bales from Mian Chano (credit) at Rs 6100, they said.


The KCA Official Spot Rate for Local Dealings in Pak Rupees
Rate              Ex-Gin   Upcountry   Spot Rate    Spot Rate    Difference
For      Price     Ex-Karachi  Ex. KHI. As   Ex-Karachion 12.12.2012
37.324 Kgs        5,850       155        6,005         6,005            NIL
40 Kgs            6,269       155        6,424         6,424            NIL

Courtesy: BR

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