KARACHI, April 23: After ruling static for the last couple of sessions, cotton rates on Wednesday showed a modest increase signalling the revival of mill demand amid fears of an imminent price flare-up.
But ginners appear to be in no obliging mood and held on to their positions to sell their stocks at much higher prices during the next couple of weeks, dealers said.
“The falling unsold stocks with the ginners seem to have forced spinners back in the market after their strategy to outwit the former failed”, they said.
Both spinners and mills have been keeping to the sidelines for last about a week in apparent bid to force ginners to lower their asking prices but they withdrew to the sidelines rather than selling at the lower rates.
“I don’t think some of the leading ginners may have an unsold stock with them more than 0.2m bales at this time”, says a leading broker commenting on the supply and demand factors “it is a crucial time for the both before the arrival of new crop”.
But the general perception is that the market is expected to heat up during the next couple of weeks as falling ready stocks will have a bullish impact on the existing price line.
After their absence from the market for the last couple of sessions, spinners offered to buy stray lots but finding no positive response from the ginners, they opted for some inferior lots from the central Sindh cotton belt, while ginners from the southern Punjab held on to their unsold position.
Meanwhile, reports coming from central and upper Sindh and the Punjab cotton belt indicate that growers have made an elaborate arrangements to resume sowing from May 15 and complete by June 15, considered an ideal time for the steady growth of the tender plants.
However, despite lower official cotton acreage (10.5m acres) during the next season, growers are expected to increase their plantation intentions as the higher prices, which they got during the current season, will encourage them to do that, dealers said.
It was in this background that official spot rates upped by Rs5 per maund after a couple of sessions.
New York cotton futures on the other hand suffered fresh decline of 0.6 and 0.27 cents at 58.38 and 60.46 cents per lb for both the ruling May and the forward July settlements.
Ready offtake was light totalling about 1,000 bales of inferior types, the following being notable among them: 200 bales, Sanghar at Rs2,325 and 250 bales, Shahdadpur at Rs2,400 per maund without 15 per cent sales tax.
