KARACHI, April 15: Cotton market on Tuesday lacked normal trading interest as spinners again withdrew to the sidelines leaving ginners guessing how to react to prevailing psychological warfare between them.
The chief objective of the spinners appears to be forestalling an impending price flare-up in the backdrop of falling unsold stock with the ginners, brokers said adding “so far they have successfully maintained a status quo keeping the price balance in their favour”.
In the battle of wits raging since the Pakistan Cotton Ginners Association, released the final crop figure around 9.7m bales, spinners in unison appear to have chalked out a future line of action to beat any speculative rise in prices and successfully maintained their unity.
“Those ginners who were eyeing the target of Rs3,000 per maund based on supply and demand figures were outwitted by the joint manoeuvring of the spinners and mills”, brokers said.
As a result, ginners are out to sell their stocks but there are no matching buying offers from the spinners despite the fact that they are terribly short of their annual consumption requirements of about 12m bales.
Spinners enter the market one day and stay on the sidelines for the next couple of sessions, keeping ginners at their toes all the time. Weaker among them had already lowered their asking prices to get out of an uncertain market.
In similar supply and demand scenario as the prevailing one, it becomes pretty difficult to contain the price run-up, dealers said.
According to market sources ginners may not have in their godowns unsold stock of lint more than 0.350m bales, barely enough for about two weeks mill consumption.
Meanwhile, private sector exporters have sold 2,054 bales more to Bahrain, Bangladesh and Thailand, the total foreign sales so far being at 0.175m bales including 54,148 bales of old crop.
Official spot rates did not show any change owing to volatile performance of the ready market and stayed unchanged at the previous levels.
But New York cotton futures on the other hand remained under pressure on speculative selling and fell by 0.89 and 0.55 cents at 57.11 and 59.22 cents per lb for both the ruling May and the distant July settlements respectively.
Ready offtake was modest as till late in the evening about 2,000 bales, mainly from upper Sindh ginneries changed hands. The following being some of the notable deals: 400 bales, Dharki at Rs2,600 and 500 bales, some other upper Sindh stations at Rs2,575.
