KARACHI, Aug 10: Cotton market on Saturday maintained bullish outlook as ginners and spinners remained locked in a battle of wits over the current price flare-up, but it continues to be a no-win situation.
Ready offtake shrank to a low ebb as most of the spinners withdrew to the sidelines as reports of further increase in phutti prices at Rs1,050 per maund reach here.
However, a needy spinner opted to purchase a lot of 100 bales at Rs2,325 per maund, claimed to be two-year peak level.
Until supply position improves, there is a little possibility of any major change in the prevailing price outlook and spinners are expected to remain at the receiving end for another couple of weeks, floor brokers said.
“But if they (spinners) manage to contain their panic buying for the next couple of sessions the leverage could work against the ginners,” they said, adding “how will the grower react to the counter moves which could play a decisive role in fixing the lint price.”
Cotton analysts said growers had enough time to hold back to their stocks of phutti to get a fair price or to keep prices higher, although it will largely depend on their financial positions as well as the holding capacity.
Growers could hold on to their unsold stocks for the next couple months as their lean period starts after February when their holding capacity fades as the colour of phutti turns yellowish after that and quality deteriorates, they added.
Some others said the unsold stock of the current crop with the ginners and the TCP were not more than 50,000 bales, barely enough for a couple of days and some of the spinners holding short positions have no option but to remain in the market irrespective of the price flare-up to keep their wheels moving.
While most of the leading spinners have enough stocks to cover their annual consumption needs, others have not and the consequent supply and demand factors cause prices to rise.
“The inter-mill activity is expected to gather momentum during the next couple of sessions as prices of new crop lint continue to rise,” one broker said, adding “those spinners holding surplus stock beyond their annual demand will indulge in inter-mill trading at the higher prices without entering the spinning process.”
Official spot rates were upped to Rs2,000 per maund, while New York cotton futures were marked lower by 0.31 and 0.48 cents per lb at 44.29 and 45.63 cents for both the ruling October and the distant December settlements, respectively.
Ready business was light as till late in the evening about 1,000 bales of new crop changed hands, the following being some of the notable deals: 100 bales of Mirpurkhas at Rs2.325; 100 bales, Khipro at Rs2,300; and 400 bales of Sultanabad at Rs2,250.
