KARACHI (July 28 2010): After the removal of Regulator Duty (RD) on the exports of cotton yarn, the cotton market may find a definite direction in the coming days, dealers said. The Karachi Cotton Association (KCA) official spot rate was unchanged at Rs 6000, they said.

In the ready business about 8000 bales of cotton changed hands between Rs 5800-6200, they said. Phutti prices in Sindh were trading at Rs 2650-2700 and in Punjab, the rates were at Rs 2750-2800, they added. According to the market sources price instability may end after the removal of regulatory duty and quota restriction on the exports of cotton yarn.

But, they said that one factor is there, ie the decision is a little bit surprising for the cotton trade as there were anticipation that the cabinet committee on textile may extend time but it has decided to end regulatory duty. This move may stabilise or increase prices in the coming days, they said. Another factor is rains, which may delay picking operations and may cause late arrival of phutti at the ginneries, they said.

Some other analysts said that after the cabinet decision, clarity on the RD issue would help growers and ginners, making decision in the right direction. On Monday the NY cotton futures closed at a fresh two-week top on follow-through buying as the market successfully raced past key technical barriers and the momentum may push values higher this week, brokers said.

The December cotton contract increased 1.15 cents or by 1.52 percent to end at 76.49 cents per lb, moving from 75.34 to 76.53 cents. It was the loftiest close for the second-position contract since July 8. The spot October cotton contract gained 0.90 cent to finish at 81.22 cents. October enjoys a 4.73-cent premium over key December, from the previous session's premium of 4.98 cents. Volume traded in the December contract stood at 14,592 lots at 2:39 pm EDT (1839 GMT).

The following deals were reported: 200 bales of cotton from Chichawatni sold at Rs 6200, 800 bales from Shadadpur at Rs 5800-5850, 200 bales from Shahdadpur at Rs 5875, 1000 bales from Tando Adam at Rs 5800-5900, 400 bales from same station at Rs 5900, 200 bales from Sanghar at Rs 5875, 200 bales from same station at Rs 5800, 800 bales from Sultanabad at Rs 5800-5850, 200 bales from same station at Rs 5825, 200 bales from Vehari at Rs 6050, 2000 bales from Burewala at Rs 6050-6100, 200 bales from Gojra at Rs 5875, 200 bales from Sahiwal at Rs 6100, 200 bales from Arifwala at Rs 6050, 200 bales from Hasil Pur at Rs 6050, 200 bales from Chichawatni at Rs 6050, 200 bales from Ghazi Abad at Rs 6050, 200 bales from Multan at Rs 6050, 400 bales from Khanewal at Rs 6100, 200 bales from Mongi Bangla at Rs 6100.