KARACHI, April 9: Cotton prices on Wednesday remained stable at the overnight levels but spinners again withdrew to the sidelines after having made hectic covering purchases a day earlier.
In physical trading stray lots did change hands depending on the quality of lint in trade, mostly below the target price of the ginners above Rs2,600 per maund.
Floor brokers said although spinners and mills have to go a long way to see the current season through in the backdrop of a short crop, at no stage they showed signs of nervousness and played safe.
“Their chief motive behind playing safe is not to trigger a price flare-up a common phenomenon of a short crop”, they said adding “that is perhaps why prices are declining instead of rising for the last couple of sessions”.
There is a perception and shared by some cotton analysts also spinners are awaiting the end of Iraq war and intend to go on a big shopping list to buy foreign lint to make up the local crop shortfall, they said.
Meanwhile, some of the leading spinners have raised their ratio of synthetic fibre with cotton to produce blended yarn and cloth after the producers of the former have slashed prices by Rs5 per kg.
“The hide-and-seek game being played by them has tilted the price balance in their favour at least for the near-term as some of the ginners appear to be in a bit haste to sell their unsold stock at the prevailing prices”, market sources claim.
However, leading among the ginners are holding on to their unsold stocks hoping to sell them at a better price after the war ends and foreign textile trade gets normal, they added.
According to market sources ginners now may not have more than half a million bales of lint in their godowns, bulk of which is expected to be exhausted before the new crop from the lower Sindh ginneries arrives on the market some time late June or early July.
Official spot rates remained pegged at the last levels owing to slack physical business in the ready section. But on the other hand New York cotton futures ended further lower by 0.35 and 0.31 cents at 56.97 and 58.56 cents per lb for both the ruling May and the distant July contracts respectively.
Ready business was light as till late in the evening about 2,000 bales changed hands, the following being notable among them: 200 bales, Kingri at Rs2,450 and 800 bales, Kabirwala at Rs2,575.
