Dollar’s surge causes tug-of-war between ginners, mills

December 19, 2012

As result cotton prices went up
As result cotton prices went up

Tug-of-war started between mills and the ginners after unprecedented rise in the dollar’s value versus the rupee, dealers said on the cotton market on Tuesday. As result cotton prices went up as on the one hand, the ginners were trying to curtail selling at the present rates, in expectations of further increase in the greenback value, but on the other hand, the mills were keen for fresh purchasing to improve their profit, they said.

Some other analysts said that after the State Bank of Pakistan’s (SBP) comprehensive discussion with the money changers on Monday to discourage speculative buying, the dollar rebounded from 100 mark versus the dollar. Some experts said that if prevailing uncertainty not come down, rupee’s recovery may proved short-lived in the coming days.

In the interbank market, the greenback was at 98.00 and in open market, the dollar was trading at 98.50 and 98.70 in terms of the greenback, they added. Official spot rate was higher by Rs 100 to Rs 6000, they said. In ready business, nearly 12,000 bales of cotton finalised between Rs 5900 and Rs 6300, they said. Cottonseed (phutti) of Sindh low type was unchanged at Rs 2400 while the best type gained Rs 50 to Rs 2750, in Punjab rates unchanged at Rs 2500-2850, they said.

Besides, the Pakistan Cotton Ginners Association (PCGA) issued fortnightly report, showing the phutti arrivals into ginneries till December 15, 2012 were at 10.77 million bales, they said. Over 10.7 million bales of cotton reached 962 ginneries across the country till December 15, showing an increase of 2.42 as compared to last year during the same period, issued by Pakistan Cotton Ginners Association (PCGA).

According to the report, cotton arrival was recorded to be 10,768,861 and 10,187,909 bales were ginned. The report stated that exporters purchased 171,946 bales while 8,853,314 bales were bought by textile units. The Cotton Corp of India said that cotton supplies in local spot markets from the new crop in India, the world’s second-largest producer of the fibre, have fallen 10 percent in the current season that began in October, According to the Reuters, the US cotton settled up after hitting a two-month high on Monday on speculative buying linked to expectations among some traders that US stockpiles could fall further from supportive levels reported nearly a week ago.

The US government lowered its 2012/13 world cotton stocks forecasts on December 11 for the first time since the marketing season started in August due to a technical adjustment and slightly higher demand. The revised data had sent the market to six-week highs.

The most-active March cotton contract on ICE Futures US settled up 0.76 cent, or 1 percent, at 75.85 cents per lb after soaring to 76.25, its highest level since October 23. Monday’s gain also marked the second session in a row that the market had closed higher. Traders put technical resistance for March at 78.80, below an October 18 high of 79.19. Volume for the session was also strong. Preliminary Thomson Reuters data showed futures transactions in ICE cotton at nearly 50 percent above the 30-day average.

The following deals were reported: 400 bales from Upper Sindh (BCI) at Rs 6200, 200 bales of cotton from Garha Mor at Rs 5900, 1400 bales from Vehari at Rs 5950, 400 bales from Fort Abbas at Rs 6000, 400 Faqir Wali at Rs 6000, 200 bales from Ahmed Pur at Rs 6000, 400 bales from Haroonabad at Rs 6000, 1000 bales from Hasil Pur at Rs 6000, 600 bales from Mian Chano at Rs 6000, 1200 bales from Bahawal Pur at Rs 6000/6050, 400 bales from Burewala at Rs 6050, 400 bales from Mongi Bangla at Rs 6075, 400 bales from Khanewal at Rs 6100, 1000 bales from Layyah at Rs 6150, 1000 bales from Rahim Yar Khan at Rs 6200 and 3000 bales from Mian wali at Rs 6300, 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 17.12.2012
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37.324 Kgs          6,000      155          6,155        6,055         +100
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Equivalent
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40 Kgs              6,430      155          6,585        6,478         +107
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Courtesy: BR

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