KARACHI, April 11: The cotton market on Friday showed quietly steady trend as ginners raised their asking prices followed by reports of steep increase in New York futures, but ready business failed to expand beyond stray lots.
Physical business remained confined to some selected lots from the central Sindh and southern Punjab as price ideas of buyers and sellers failed to find a meeting ground.
Floor brokers said the price flare-up in New York cotton futures might not have an immediate bullish impact on the local market, but leading ginners share a perception that it will have as the season is approaching to a deficient end throughout the world.
They said as the Iraq war was heading towards its logical end, speculative traders are cornering the floating stock the world over anticipating pickup in global demand after the war and the consequent increase in prices.
According to world cotton analysts, the world consumption of lint is expected to outpace the total supplies by about 3 to 4m bales, pushing prices further higher the world over.
New York cotton futures are taken as trend setters the world over as any rise and fall in them is reflected in the local prices of major producers.
The tactical game being played by the spinners and mills to neutralize the negative impact of a short crop on prices may lost relevance after the world lint becomes expensive, they said.
There was, therefore, a relative lull on the ready market as ginners were in no mood to oblige spinners at their offered prices.
“The falling unsold stock with the ginners do worry spinners but they can not go all-out for them as they have to operate within their export parity levels,” spinners said.
They said ginners might not have more than 0.4m bales in their godowns, while they still needed over a million bales to see the season through before the arrival of new crop from the lower Sindh ginneries.
On the export front, private sector exporters sold 500 bales from April 4 to 8, the total foreign sales since Sept 1, 2002 being 0.173m bales mostly of the new crop.
Official spot rates were marked down by Rs25, but on the other hand New York cotton futures rose by 1.05 and 1.21 cents per lb at 57.92 and 59.68 cents per lb for both the ruling May and the distant July settlements, respectively.
Ready offtake was modest totalling about 2,000 bales, mostly of inferior lots done below Rs2,500 per maund.
