KARACHI, Oct 26: Cotton market on Friday eased further as spinners and mills adhered to the sidelines anticipating apparently further decline in prices and did not bid even at the lower ginner offerings.
Although the activity on the market was relatively thin because of a million march from the Quaid’s mazar to Tower by the religious parties after Juma prayers and the consequent fears of law and order situation, stray lots changed hands at much lower levels.
Dealers said an idea of ginner nervousness might well be had from the fact that some of the central Sindh ginners were willing to sell their stocks below Rs.1,600.00 per maund.
“The market appears to be heading to hit new seasonal lows because of a combination of a number of negative factors, notably a considerable decline in mill buying”, they add.
After hitting the seasonal lows at Rs.1,425.00 early this month, lint prices have rebounded to as higher as Rs.1,850.00 a couple of days earlier but again are falling owing to slack mill demand.
Floor brokers said the fall of the New York cotton futures below the 30-cent per lb level had sent shock waves among the major cotton producers and predictions of further decline had further aggravated the price outlook.
The absence of spinners from the market is understandable as they are awaiting the market to settle down before resuming their covering operation, they say.
“We have to operate on the world markets for marketing value-added textile products and prices of the raw materials is major cost factor”, says a leading spinner, adding “already prices of cotton yarn and other products have declined in line with the world cotton rates to keep our competitive edge over our competitors”.
Local prices of lint could fall further as most of the leading spinners are calculating the cost factors on imports below the 30 cent per lb level, they add.
New York cotton futures fell to 28.52 cents per lb, what the analysts claim, is 30-year low level, for the ruling December contract, while the forward March fell 53 cents per lb at 30.22 cents per lb.
Official spot rates were also lowered by another Rs.25.00 per maund for the third day in a row.
Ready offtake was light as leading ginners were not inclined to sell at the falling prices. As a result only 2,000 bales, changed hand, the following being some of the notable deals: 700 bales of Tando Adam at Rs.1,575.00, 200 bales, Tharo Shah at Rs.1,650.00 and 200 bales of Rajanpur at Rs.1,725.00.
