KARACHI, April 29: Physical activity on the cotton market remained at a low ebb for the second session in a row as both mills and spinners adhered to the sidelines awaiting fresh developments on the world markets.
“The limit-fall in New York cotton futures may altogether change the entire world cotton outlook in the coming weeks”, predicts a leading spinner adding “it will have a negative impact on the lint prices globally”.
New York cotton futures on Monday fell by 2.05 and 1.71 cents per lb at 55.75, and 57.38 cents per lb for both the ruling May and the distant July settlements sending bearish signals to the world markets.
Pakistan cotton market is not be affected by the negative developments on the world cotton scene but some spinners speculate it may exert pressure on local supplies because of a short crop.
However, it will certainly turn world prices more competitive and leading spinners are expected to make fresh forward deals without awaiting further decline in prices, some brokers said.
But others said spinners will await fresh developments hoping for further decline in prices and may not ride the bandwagon just in one go.
Leading spinners who still need another half a million bales of lint to make up their seasonal shortfall welcomed the reversal in world prices. Any further fall could make their end-products more competitive.
That is perhaps why they are staying out of the local market hoping for an identical fall in prices in the coming days and to cover positions at lower rates.
But ginners who still hold an unsold stock of about 0.3m bales are least worried over the recent developments on the world markets and are confidently holding on to their positions without lowering their asking prices, brokers said.
They said the current standoff between the ginners and the spinners is expected to continue during the next couple of weeks guided by the demand and supply factors rather than the bullish signals from the world markets.
The next couple of sessions are expected to witness dull conditions and low ready offtake as spinners will re-enter the market after having assessed the difference between the local and foreign prices and their impact on the end-products on the world markets.
Official spot rates were firmly held at the last levels for the third session in a row in the absence of ready business.
