950826

Cotton prices sharply up

on week opening day

RECORDER REPORT

KARACHI: Spot rates of cotton shot up sharply by Rs. 100 on the week opening day on Saturday. The prices in ready also rose to match the spot rates as the spinners extended support by lifting every bale on offer on the perception of further likely rise in cotton prices.

However, forwards the close, market sources said, prices showed downward trend.

On international markets, cotton futures prices were maintaining firm posture. The futures rates in New York moved in the 81/85 cents a pound range. However, rates as were quoted on August 23, 1995, were: October at 85.35 cents a pound, December 82.90 cents and 83.70 cents March.

Spot rates were quoted sharply higher of new crop Niab, lately on the surge. Spinners have been extending full support as apparently the ruling rates fall within their export parity range. Being hold up in so many ways, it appeared strange that they become engaged in almost a mopping up operation. A little rise seems not only acceptable but logical till such time as upper Sindh and Punjab cotton is put on sale.

Market sources were however looking from a different angle. They said there was no ground for price hike in quick succession. They preferred to link it with the level of cotton price in the international market.

Sources close to the cotton trade noting this trend despite good crop news referred to new tendency to allow growers to sell cotton in local markets equivalent at the level of ruling price in world markets. If this is so the government will have to make some concession in the power rates and drastic cut in the mark-up to keep textile sector on the move if not to thrive.

However, new crop Niab's official rates were raised by Rs. 100 to Rs. 2100. The other two varieties maintained same level, that is K-68 at Rs. 1975 and MNH-93 at Rs. 1990.

Immediate comments were not available for the rise in cotton prices by Rs. 100. Whether this trend will spill over to the next day's session, there was no one to say with certainty, but market sources expressed the view that an eye will be kept on price movement to determine the direction.

There is news that heavy rains are expected in a few days which are likely to adversely affect the standing crop. However, meteorological people have not specified the direction, and it is also possible that Pakistan may only have its side effects.

Following deals were reported: 600 bales of Mirpukhas at Rs. 2100, 800 bales of Sultanabad at Rs. 2050, 200 bales at Rs. 2100, 600 bales of Shahdadpur at Rs. 2100, 400 bales of Sanghar at Rs. 2100, 200 bales of Jhol at Rs 2100, 500 bales of Tando Adam at Rs. 2100, 200 bales of Tando Allahyar at Rs. 2100, 100 bales at Rs. 2075, 500 bales of Shahpur Chakar at Rs. 2100 and 200 bales of Sultanabad at Rs. 2000.

KCA SPOT RATES

Niab-78 (New) Rs. 2100.00

K-68 (Current) Rs. 1975.00

MNH-93 (Current) Rs. 1990.00

CAKE FUTURES

Both futures were higher sharply on the forward cotton seed oilcake market on Saturday, where buying activity slightly dipped.

The ruling December contract commenced 50 paisa higher at Rs. 215.50 and gained further Re one to be the highest at Rs. 216.50. Later tempo of rise could not be sustained and turned lowest at Rs. 214.20 but closing was seen sharply higher at Rs. 216.30, to show a rise of Rs. 30.

The other, January delivery also opened 50 paisa better at Rs. 216.50 and gained Re one in identical manner to claim to be the highest at Rs. 217.50. Later rising tempo could not be maintained and it dipped sharply to be the lowest at Rs. 215.20 and closed higher at Rs. 217.30 to show a gain of Rs. 1.30. As a result its adverse badla turned out to be Re one.

The activity was modest and turnover estimated at 500 lots.

DECEMBER VAIDA

Last Closing Rs. 215.00

Saturday's Opening Rs. 215.50

Highest Rs. 216.50

Closing Rs. 214.20

Lowest Rs. Rs. 216.30

JANUARY VAIDA

Last Closing Rs. 216.00

Saturday's Opening Rs. 216.50

Highest Rs. 217.50

Lowest Rs. 215.20

Closing Rs. 217.30