KARACHI: The Karachi Cotton Exchange (KCE) increased its cotton spot rate by Rs50 per maund (37.324 kilograms) to Rs6,500 per maund on Tuesday after local markets faced shortage of fine quality commodity in demand, a dealer said.
“Continuous increase in price of fine quality cotton at the open market convinced the KCE to revise upward its cotton spot rate to Rs6,500 per maund,” Taqi Abbas, a member of the Advisory Committee of the Karachi Cotton Association, said.
“This is for the first time in the ongoing fiscal year July 2012 to June 2013 that the spot rate has surged to the current level.”
Widening gap between higher demand and lower supply for the commodity in demand at the local market has resulted in shooting up its price up to Rs7,300 per maund on credit, while the same quality cotton was being traded on cash at Rs6,800 per maund.
“Market talks suggest that the price of the commodity may further jump to Rs7,500 on credit,” he said.
Traders exchanged 5,000 bales at Rs6,100 to Rs7,000 per maund at the local market during the day against no trading a day ago, the KCE reported.
Sadiqabad witnessed the highest trade of 1,000 bales at Rs7,000 per maund on credit and Kumb and Haroonabad traded 600 bales each at Rs6,250 to Rs6,650 per maund, the KCE said.
Khairpur, Ghotki, Faqir Wali, Fort Abbas and Bahawalpur traded 400 bales each at Rs6,250 to Rs6,800 per maund on credit and cash; and Salehpat, Sukkur, Chistian and Mianwali traded 200 bales each at Rs6,100 to Rs6,700 per maund, it added.
The broker said that majority of ginners were not selling fine quality cotton at prevailing prices and opted to wait for further surge in price.
A day ago, Pakistan Cotton Ginners’ Association reported a decline of 1.60 million bales to 12.76 million bales’ production in the first seven months (July 2012 to February 2013) of the ongoing fiscal year against 14.37 million bales produced in the same period last fiscal year.
At the New York cotton market, March futures contract surged by 1.23 cents per pound to 84.91 cents, while May futures contract rose by 0.86 cents per pound to 86.26 cents, the KCE reported. The China cotton index increased by four points to 19,340 points, it added.