KARACHI, Aug 29: Trading activity on the cotton market on Friday slowed down as spinners withdrew to the sidelines after ginners again raised their asking prices.
Unlike the overnight session, when spinners and mills flooded the market with buystop after prices fell below the Rs2.500 per maund level, both were a bit cautious and were not inclined to buy at the higher rates, dealers said.
Stray lots, therefore, changed hands between Rs2,500 on the lower side and Rs2,575 on the higher side, but the market terribly lacked normal trading activity, they said.
They said ginners seemed to have taken cue from the rising world prices and decided to hold on to their stocks in apparent effort to sell them at the higher rates.
“The prevailing battle of wits will continue as both will try to tilt the price balance in their respective favour, although it is unclear at this stage who will outwit the other,” says a broker.
But being in a terribly short positions owing to last year’s lower crop and higher consumption figures, spinners may remain at the receiving hand during the current season too, they said.
However, much will depend on the size of the crop and the price trend on the world market during the mid-season that is by late October and early November as by that time world production and consumption estimate will be available, they said.
Meanwhile, reports coming from the end-product users, notably the ancillary industry indicate that prices of cotton yarn have, during the last couple of week, risen by Rs10 to Rs25 per bundle of 10 lb.
Most of the forward deals being made by the spinners are also claimed to be on the higher side as owing to reports of short crop in China and India world prices of yarn are higher.
Local ginners say arrivals of the phutti into the ginneries are on as picking operations of phutti are in full swing in the entire lower and central Sindh belt owing to clear weather.
Official spot rates were, therefore, firmly held at the last levels after the ready prices showed a modest improvement.
New York cotton futures on the other hand maintained their upward drive and rose further by 0.62 and 0.69 cents per lb for both the ruling October and the distant December contracts at 56.75 and 58.35 cents, respectively.
Ready offtake was light as till late in the evening about 2,000 bales changed hands as under, excluding 15 per cent sales tax:
SINDH TYPE: 700 bales, Shahdadpur at Rs2,575; 700 bales, Tando Adam also at Rs2,575; 100 bales, Mirpurkhas at Rs2,500 and 100 bales at Rs2,520.
PUNJAB VARIETY: 200 bales, Burewala at Rs2,625; 200 bales, Mongi Bunglow also at this rate; and 600 bales, Bahawalnagar at Rs2,600.
