KARACHI, May 21: Cotton market on Tuesday lacked normal trading interest as spinners were not inclined to bid at the higher asking prices because of export parity problems against yarn shipments.
The market undertone was distinctly weak as tired ginners failed to lure spinners back after further lowering their asking prices.
Although the TCP is in the market, its daily offtake is too small to ensure that the entire unsold stock will be exhausted before the arrival of the new crop from the lower Sindh cotton belt, dealers said.
The cotton situation in regard to supply and demand was further aggravated after the Pakistan Cotton Ginners Association (PCGA) has decided to announce final crop figures on May 31, discarding the fortnightly exercise apparently for some technical reasons, they added.
The official crop assessment committee has already placed an ex-gin total at 10.5m bales, which spinners and mills claim is barely enough to meet their, together with the unorganized sector, annual consumption needs.
Ginners fear further decline in prices after the final crop figure is out as spinners and mills will buy at their own named prices rather than the prevailing international market rates.
But floor brokers attributed the current lack of normal mill demand at this time of the season to larger imports at the cheaper rates, which have created more than one problems for the ginners.
In the absence of an official date about the unsold stock, speculative forces could work both sides of the market, although there is a little possibility of any big change in the prevailing prices.
But rather ginners fear further decline as mill demand may remain sluggish owing to reported oversupply and huge stock positions built-up by the mills through imports of over a million bales.
Meanwhile, brokers say the future price outlook will largely toe the line of bids of foreign buyers against the TCP international tender for 23,000 bales fine type of lint cotton procured from the model ginning factories as contamination-free lots.
Official spot rates did not show any change, but New York cotton futures suffered fractional decline of 0.15 and 0.11 cents per lb for both the ruling July and the distant October settlements at 35.74 and 38.19 cents per lb, respectively.
Ready offtake was confined to a big lot of 6,500 bales from a Bahawalpur ginnery at Rs1,550 per maund.
