December 16, 2012
Prices went up amid fall in trading activity on the cotton market on Saturday as the ginners raised asking prices on tight supply of seed cotton (Phutti), dealers said. Official spot rate was unchanged at Rs 5,300, they said. In ready business, nearly 14,000 bales of cotton finalised between Rs 5700 and Rs 6175, they said.
Prices of seedcotton (phutti) were unchanged in Sindh at Rs 2400-2750 and in Punjab, rate of low variety was unchanged at Rs 2400 while the fine type was up by Rs 50 to Rs 2850, they said. Market sources said that the ginners raised asking prices following expectations of increase in business activity after the State Bank of Pakistan (SBP) move. As a result of sharp fall in the business activity in the country, the SBP during the out-going year bring down interest rate with gradual pace, in its December monetary policy, cut down policy interest rate by 50 pasis points to 9.50.
If they (ginners) push up prices in the coming days, the mills may start importing finer cotton at the below rate from foreign countries, cotton analyst, Naseem Usman said. According to the Reuters, cotton prices closed slightly higher on Friday as thin technical buying held fibers above a key support level and allowed the market to notch up gains for a third straight week. Remaining close to six-week highs, the most-active March contract on ICE Futures US settled up 0.53 cent, or 0.71 percent, at 75.09 cents per lb. Prices were up 1.8 percent on the week.
Speculative investors had piled back into the niche market on Tuesday after prices broke above a short-term trendline at 74.5 cents per lb. Rallies may only be temporary, though, due to producer selling and profit-taking by speculators. Volumes were low, with just under 8,700 lots of March contracts changing hands on the day.
The following deals were reported: 400 bales of cotton from Kotri at Rs 5300, 400 bales from Tando Adam at Rs 5300, 200 bales from Shahdadpur at Rs 5650, 500 bales from Sanghar at Rs 5700, 400 bales from Dolatpur at Rs 5800, 800 bales from Khairpur (BCI) at Rs 6100, 3000 bales from Upper Sindh (BCI) at Rs 6100, 200 bales from Khichiwala at Rs 5850, 1200 bales from Bahawalpur at Rs 5875-5900, 200 bales from Haroonabad at Rs 5900, 400 bales from Shujabad at Rs 5900, 400 bales from Layyah at Rs 6000, 400 bales from Dera Ghazi Khan at Rs 6000, 800 bales from Sadiqabad at Rs 6000, 1400 bales from Rahimyar Khan at Rs 6000, 400 bales from Khanpur at Rs 6000, 400 bales from Mohammadpur at Rs 6050, 600 bales from Fazilpur at Rs 6100, 1200 bales from Rajanpur at Rs 6100 and 1200 bales from Mianwali at Rs 6150-6175, they said.