KARACHI, Oct 29: Trading on the cotton market on Monday resumed on a relatively dull note as spinners adhered to the sidelines most of the time anticipating further decline in prices.
Most of the deals in the ready section were, however, finalized in line with the previous weekend rates depending on quality premiums, the lowest being Rs.1,575.00 for the central Sindh type and the highest Rs.1,750.00 for the southern Punjab fine lint.
Ginners are also inclined to hold the price line and refrained indulging in hasty selling, although weaker among them are not following their line of action and continued to liquidate their positions around their parity levels.
As the picking operations of phutti in the major cotton growing areas including southern Punjab are gaining momentum each day, the arrivals into the ginneries have considerably improved, which in turn have depressed prices at the fag-end of the last week, dealers said.
They said while most of the growers were selling their phutti at the spot rates, making things more easy for the ginners to keep their unsold positions in order, leading and progressive farmers are dumping it at an unfixed rates in a hope to get better prices.
“There are reports that some of the big farmers are holding on to the their stocks and demanding cash payments at their godowns both from the brokers and the agents of the ginners”, claims a leading cotton broker.
Local market sources, some of whom own ginning factories in the central Sindh cotton belt, said that pace of arrival of phutti reflected that growers were not inclined to hold on to their positions and were selling on cash basis well below the official procurement rate of Rs.780.00 per 40 kg.
“The near-term cotton outlook appears to be a bit bearish as falling demand for textiles from the world importers has considerably curtailed the mill buying against forward sales”, they add.
Moreover, Rs.8.00 to 12.00 per kilo decline in local cotton yarn prices has also eroded the competitive edge of the spinners and mills, which are making guarded forward buying, having negative impact on the price line.
Official spot rates were quoted higher by Rs.15.00, on the higher side as compared to those noted in physical trading. Ready offtake was light as till late in the evening about 3,000 bales changed hands, the following being some of the notable deals:
SINDH VARIETY: 200 bales of Sanghar at Rs.1,575.00, and 200 bales at Rs.1,625.00.
PUNJAB TYPE: 1,000 bales of Sardargarh at Rs.1,725.00, 200 bales, Mehrabpur at 1,700.00, 200 bales, Arifwala at Rs.1,635.00, 200 bales, Rahimyar Khan at Rs.1,725.00 and 200 bales of Sadiqabad at Rs.1,750.00.
