Lint prices hit Rs 9,000 mark, spot rate at Rs 8,500 amid rumours of tight Supplies

KARACHI: Prices were sharply higher on the cotton market on Wednesday as mills and exporters did active buying following the tight supplies rumours, dealers said. The Karachi Cotton Association (KCA) raised official spot rate by Rs 200 to Rs 8,500, they said.In the ready business over 30,000 bales of cotton changed hands between Rs 8,400-9,000, they said. Seed cotton prices in Sindh and Punjab were sharply higher by Rs 100 to Rs 3900-4100 due to panic buying, they said. Market sources said that prices are tracking the NY cotton futures and tight supplies and delay by India in finalising the contracts causing rising uncertainties among cotton traders and this factor is pushing the prices sharply up.According to a report the latest spike in US cotton futures to record highs replicates a bullish pattern that has been recurring for the last six weeks, where higher highs and higher lows point to a continued upward march. In Asia on Wednesday the US and China cotton futures climbed to all-time highs as tightening global supplies and strong demand from the world’s top importer, China, continued to bolster the markets.Bullish fundamentals have drawn large inflows of speculative funds into cotton, making it the best performing commodity this year, outshining the record-setting gold market and wheat futures. China’s benchmark Zhengzhou cotton jumped 4.6 percent to 29,950 yuan a tonne, setting a new record for a third straight day, while the ICE Futures benchmark December cotton contract rose to a historic high of $1.3810 per lb in Asian trade.

On Tuesday the US cotton futures rallied to a fresh record due to speculative fund and trade buying sparked by a surge in China’s cotton prices and worries over tight supplies spilling into the spring, analysts said. Analysts estimate that 80 percent of the US cotton crop, which is forecast at 18.87 million (480-lb) bales, already has been sold. They said most other major producers, such as Central Asia and Brazil, have sold their cotton as well. The benchmark December cotton contract rose the five-cent daily limit to trade at a record $1.3426 per lb at 9:57 am EDT (1357 GMT). The session low was at $1.2945.

The following deals were reported: 2000 bales of cotton from Rajan Pur sold at Rs 9000, 3000 bales from Shahdad Pur at Rs 8500-8600, 3000 bales from Tando Adam at Rs 8500-8600, 2000 bales from Mir Pur Khas at Rs 84000-8600, 1000 bales from Hyderabad at Rs 8500, 2000 bales from Sanghar at Rs 8400-8500, 2000 bales from Khairpur 8550-8600, 2000 bales from Upper Sindh at Rs 8700-8800, 400 bales from Chistian at Rs 8400, 400 bales from Khan Pur at Rs 8500, 3000 bales from Burewala at Rs 8500-8600, 1000 bales from Haroonabad at Rs 8400-8600, 1000 bales from Sadiqabad at Rs 8500, 600 bales from Hasil Pur at Rs 8500, 3000 bales from Khanewal at Rs 8500-8700, 200 bales from Shujabad at Rs 8500, 400 bales from Jahania at Rs 8500-8600, 1400 bales from Ahmed Pur at Rs 8600, 800 bales from Jan Pur at Rs 8600, 600 bales from Chichawatni at Rs 8600, 200 bales from Duniya Pur at Rs 8600, 1000 bales from Rajan Pur at Rs 8700-8750and 1000 bales from Dera Ghazi Khan at Rs 8700-8750. – Brecorder

===========================================================================
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-Karachi
on 02.11.2010
===========================================================================
37.324 Kgs        8,500       120        8,620        8,420            +200
—————————————————————————
Equivalent
—————————————————————————
40 Kgs            9,109       120        9,229        9,015            +214
===========================================================================