KARACHI, April 24: Cotton market on Thursday showed steady trend as ginners raised their asking prices for the fine lots after spinners resumed covering purchases.
After a couple of weeks relative sluggishness, signs of revival of mill demand were evident as leading spinners made fresh short-covering at rates depending on the quality of lint involved in the trade.
An indication of heating of the market in the backdrop of falling unsold stocks with the ginners is evident that a big deal from a central Punjab ginnery was reported at Rs2,625 per maund, says a leading broker.
For the last about three weeks lint prices had decline to Rs2,500 to Rs2,550 per maund as leading mills and spinners withdrew to the sidelines in an apparent effort to outwit ginners, he said.
But basing their future price outlook in the backdrop of a short crop, ginners held on to their positions rather than indulging in panic selling amid predictions that their hold on the market is pretty strong.
There is a perception and shared by most leading ginners holding stocks of stray lots that demand and supply factors will finally prevail and they could be the ultimate gainers.
That was perhaps why, ready offtake had fallen to modest proportions as both ginners and spinners were not inclined to be outwitted on the price front, dealers said.
They said revival of mill demand is expected to encourage ginners to raise their asking prices and spinners and mill will be obliged to toe their line of action because of pressure on ready supplies, they added.
They said presence of some private sector exporters is reflective of the fact that foreign demand for lint is picking up in the post-Iraq war sessions. A leading exporter purchased 400 bales from a Sindh ginnery at Rs2,500 per maund, sending signals that spinners will have to follow them to grab the floating stock of lint.
There was no change in the official spot rates but New York cotton futures remained under pressure and fell further by 0.18 and 0.97 cents at 58.20 and 59.49 cents per lb for both the ruling May and the forward July settlements respectively.
Ready offtake was on the higher side as till late in the evening about 10,000 bales changed hands as under:
SINDH TYPE: 400 bales, Shahpur Chakkar at Rs2,500, 200 bales, Sanghar at Rs2,425 and 1,000 bales, Sarari at Rs2,400.
PUNJAB VARIETY: 400 bales, Yazman at Rs2,565, 2,600 bales, Khanpur at Rs2,585 to Rs2,600, 1,000 bales, Lodhran at Rs2,600, 600 bales, D.G.Khan at Rs2,500 and 1,600 bales, Multan at Rs2,625.
