
November 4, 2001	Sunday	Shaba’an 17, 1422

Firm trend on cotton market

By Our Staff Reporter

KARACHI, Nov 3: Cotton prices on Saturday maintained their upward drive and were quoted higher by Rs.25.00, but in physical trading fine type from the Punjab ginneries was sold at a premium.

Some of the deals in the ready section were done as higher as Rs.1,825.00 and well above it depending on quality premiums, creating problems for the spinners, who could precisely decide “to buy or not to buy” at rising prices, brokers said.

The chief worry of the spinners and the mills is that they have to be competitive as higher local prices of lint make textiles more expensive leading to fall in exports, they added.

According to local spinners the ruling lint prices are higher than the prevailing world ones as the New York cotton futures were quoted below the 30-cent per lb level for the ruling December contract at 29.96. The forward March closed off, nominally at 31.62 cents per lb.

“Heavy buying being made by the TCP may be one of the reasons behind the current price flare-up”, says a leading spinner adding “world demand for the lint remains slow owing to prevailing recession”.

He says local rates have inched up to the official procurement rate of Rs.1,855.00 per maund for a good quality lint but the sympathetic rise in other varieties has made lint a bit expensive and above their export parity levels.

“We are facing the dilemma of falling cotton yarn and cloth prices, the rising lint prices have created some new problems for us,” spinners claim.

Lint prices have, over the last month, risen by Rs.400 per maund from the low of Rs.1,425.00 to 1,825.00 and there is possibility of further increase in the weeks to come.

Growers are holding on to their phutti stocks as arrivals into the ginneries have considerably declined, a leading ginner from the central Sindh cotton belt claims, adding “farmers could hold on to their positions until the end of January and in the intervening period prices could rise further”.

However, the recent persistent rise in lint prices is not fully reflected in phutti rates and that is perhaps why growers are holding back in part their stocks, ginners said.

It was perhaps in this ground that official spot rates were further raised by Rs.25.00 per maund at the weekend session in line with the ready prices.

Ready business was moderately active as about 5,000 bales changed hands, the following being some of the notable deals: 1,000 bales of Rajanpur at Rs.1,800 to 1,825.00, 200 bales, Hasilpur at Rs.1,805.00, 200 bales, Jalalpur at Rs.1,815.00, 200 bales, Lodhran at Rs.1,820.00, 300 bales, Kabirwala at Rs.1,825.00, 600 bales, Mian Channu at Rs.1,700 to 1,725.00 and 800 bales of Chichawatni at Rs.1,700 to 1,725.00.

Transactions in Sindh variety were modest, totalling about 1,000 bales, mostly from the central Sindh cotton belt.