KARACHI (February 03, 2011) : Official spot rate after a short break, went up to touch all-time high level on the cotton market on Wednesday due to persisting demand in the world market, dealers said. The Karachi Cotton Association (KCA) spot rate was raised by Rs 200 to Rs 11000, they said. Phutti prices in Sindh and Punjab were unchanged at Rs 4200-5200, they said.
In the ready business, trading activity improved as about 12,000 bales of cotton changed hand between Rs 10,200-11500, they added. A few ginners showed interest in fresh selling and finalised the deals below their psychological level. Mills were also ready to grab the lots, which were matching with the export parity level, experts said.
Commenting on the thin activity, they said that short crop and higher demand pushed prices higher, but it looks that some ginners may try to sell to keep themselves away from the dullness because of long holiday in China. Some analysts said that the government may take measures to bring out the mills and spinners from the prevailing uncertainties.
According to a report India has asked traders to apply for cotton yarn exports for unshipped quantities out of the 720 million kg allowed in the 2010/11 season, a government circular said. Exporters must apply between February 2 and February 7, the circular said, and after getting permission have to export the quantity by March 31.
Besides global cotton use will rebound in 2011/12, a year after soaring prices and limited output stunted consumption, International Cotton Advisory Committee (ICAC) said on Tuesday. The ICAC said world cotton production will rise to 27.4 million tonnes from 25.1 million tonnes during 2010/11. Demand will increase by 700,000 tonnes to 25.4 million tonnes.
On Tuesday the US cotton futures settled higher for the second day running on speculative buying inspired in part by stronger Chinese prices, with no sign speculative bulls are done rallying fibre contracts. Cotton futures had risen over 22 percent in a fresh rally that began in the middle of January, with Chinese cotton futures matching the rally in the US market.
The rally has made cotton the early leader of commodities in the Reuters-Jefferies commodity index in 2011, as it rose almost 20 percent year to date. In 2010, cotton was the best performing commodity as it went up over 90 percent. The key March cotton contract on ICE Futures US rose 3.78 cents or 2.2 percent to settle at $1.7222 per lb, dealing from $1.6923 to daily limit up at $1.7244. Total volume stood around 26,800 lots, about 40 percent above the 30-day average, Thomson Reuters preliminary data showed.
The following deals were reported: 600 bales of cotton from Mir Pur Khas sold at Rs 10400-10500, 400 bales of cotton from Sanghar at Rs 10800, 400 bales of cotton from Shahdad Pur at Rs 10800, 400 bales of cotton from Kumb at Rs 10900, 1200 bales of cotton from Ghotki at Rs 11400-11500, 200 bales of cotton from Layyah at Rs 10200, 1000 bales of cotton from Bahawal Pur at Rs 10300, 400 bales of cotton from Bahawal Nagar at Rs 10400, 200 bales of cotton from Muridwala at Rs 10800, 400 bales of cotton from Mian Channu at Rs 11000, 1000 bales of cotton from Rahim Yar Khan at Rs 11000, 927 bales of cotton from Shadan Lund at Rs 11000, 400 bales of cotton from Ali Pur at Rs 11150, 400 bales of cotton from Mianwali at Rs 11200 and 400 bales of cotton from Dera Ghazi Khan at Rs 11500
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