Cotton market: moderate trading on rate cut expectations

Cotton Market

December 15, 2012: Moderate trading was witnessed on the cotton market on Friday as most of the traders were expecting that the rate cut move by the State Bank of Pakistan (SBP) to revive economic activity in the country, dealers said. Official spot rate was unchanged at Rs 5,850, they said. In ready business, prices came down slightly as 20,000 bales of cotton finalised between Rs 5700 and Rs 6050, 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 rate down at 9.50, which may fuel inflation but on the other hand this move likely to create business activity in the country. Cotton analyst, Naseem Usman said that it is a positive development under the circumstance and hopefully, industrial activity may cause creation of new jobs, both mills and ginners were looking satisfied, they said.

Business community has termed 50-basis point cut in the mark-up by the State Bank of Pakistan as insufficient and demanded further reduction to bring it down to 8-percent. They said that 50-basis point cut in mark up is meagre and half-hearted attempt to bring the economy on track. They further said that the central bank should reduce the mark up to 8 percent and Bank should have taken some bold step and curtailed it to at least 150 basis points. The decrease will hardly improve the local investment scenario.

According to the Reuters, the US cotton prices closed lower on Thursday as technical buying ran out of steam after US data revealed weekly export sales dropped by a third and as grains remained under pressure. The US government data raised fears among some investors that recent stronger demand from abroad, particularly from top producer and consumer China, has started to wane. Weekly sales have increased steadily over the past six weeks.

In Thursday’s data, net upland sales in the week to December 6 fell 32 percent to 283,900 running bales from the prior week, with almost half heading to China. It was the smallest sales since the November 2 data and was a sharp drop from last week’s number covering the week to November 29 when sales hit 415,700 bales, their highest since mid-June. China bought over 254,000 bales. Retracing half the ground gained over the previous two days, the most-active March contract on ICE Futures US settled down 0.56 cent, or 0.75 percent, at 74.56 cents per lb. It hit technical resistance around 75.2 cents per lb.

The following deals were reported: 1000 bales of cotton from Banchi at Rs 5700/5800, 400 bales from Sarhari at Rs 5725, 1200 bales from Khairpur at Rs 5950/6000, 3000 bales from Upper Sindh at Rs 6000, 400 bales from Darah Wala at Rs 5825, 1000 bales from Haroonabad at Rs 5850/5900, 2000 bales from Bahawalpur at Rs 5850/5900, 400 bales from Layyah at Rs 5950, 400 bales from Vahari at Rs 5950, 3000 bales from Rahimyar Khan at Rs 5950/6000, 1000 bales from Sadiaqabad at Rs 5950/6000, 1000 bales from Khanpur at Rs 6000, 200 bales from Jampur at Rs 6000, 1600 bales from Ahmedpur at Rs 6000, 2000 bales from Rajanpur at Rs 6000-6050 and 400 bales from Mianwali at Rs 6050, 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-Karachion 13.12.2012
===========================================================================
37.324 Kgs          5,850      155          6,005        6,005          NIL
---------------------------------------------------------------------------
Equivalent
---------------------------------------------------------------------------
40 Kgs              6,269      155          6,424        6,424          NIL
===========================================================================

 

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More