KARACHI, Jan 10: Cotton market on Thursday showed an improved trend as spinners remained active buyers of quality lots offered by ginners below Rs1,800 per maund.
As a result, for the third session in a row big-lot business was reported as leading spinner groups resumed their covering operations after the entry of exporters into the market.
Although the rates, between Rs1,675 and Rs1,775, at which business is currently being transacted are claimed by ginners below their parity levels, they are obliged to liquidate long positions for financial reasons.
“Ginners seem to have lost all hopes of a possible pick up in rates despite the fact that the mid-season slump may not be a correct assumption about the future market outlook”, says a floor broker.
He says the last three to four months before the new crop arrives on the market in early August in lower Sindh could be very crucial for the cotton economy as well as the price trends.
But a big unsold stock of over 2 million bales worries giners amid fears that prices could fall further if mills did not resume their normal buying during the next couple of weeks.
Market sources claim spinners are also weighed down by the falling demand for the cotton yarn and they too are the victim of large unsold inventories, which in turn has curtailed their normal market operations.
The future mill buying will largely be guided by the proceedings on the export front and the improvement in prices of end products including cotton yarn, they say.
Meanwhile, reports coming from the southern Punjab ginneries say ginners have resumed buying leftover stocks of phutti held up owing to moisture caused by heavy fog during the last about two weeks.
Official spot rates remained did not show any change and remained pegged at the last levels, although most of the deals in the ready section were done at the higher rates.
Ready business was active as till late in the evening about 10,000 bales changed hands as under:
SINDH TYPE: 1,000 bales, Bandhi at Rs1,675, 2,000 bales, and Sakrand at Rs1,700.
PUNJAB VARIETY: 2,000 bales, Sadiqabad at Rs1,725 to Rs1,775.00, 2,000 bales, Rahimyar Khan at Rs1,750 to Rs1,775, 1,000 bales, Bahawalpur at Rs1,700 to Rs1,750, 700 bales, Khanpur at Rs1,775 and 200 bales, Bagho Bahar.
