KARACHI, June 26: Cotton prices on Saturday resisted fresh decline as revival of mills demand was widely welcomed by ginners and some of them obliged spinners after lowering their asking prices.
For the second session in a row modest business was witnessed in the ready section as the spinners were not inclined to go in a way fearing an increase in prices, brokers said.
They said the mills and spinners were now out to lift the unsold stock of about 0.4m bales lying with the ginners but may not go beyond their export parity levels as they have to compete in the world textile markets.
A wide difference in the selling prices of low-mic and fine lots at Rs2,350 and Rs2,900 reflects that the spinners have now an upper hand in setting the selling prices despite pressure on supplies.
"The big leverage to outwit the ginners the spinners have is the massive imports of about 2.2m bales, purchased on an average price of around 60 cents per lb," market sources said, adding "ginners are at their toes for the last two months as spinners are playing a hide-and-seek game with them, telling them there are other sources of supply also."
They said no one could dispute the fact that mills annual consumption had soared to well over 12m bales because of a massive expansion programme of $5bn carried out by the textile sector during the last couple of sessions but the rumoured import of 2.5m bales are said to be enough to build-up a buffer stock for the next season.
"One thing now appears certain that the ginners may not be able to get their pre-determined price of well over Rs3,000 per maund based on a short crop as the supply gap has already been filled in by the spinners through imports," they said.
The ginners have also realized the change in the market psychology and lowered their asking prices to sell their unsold stock at the offered prices.
However, it is clear now that both the mills and spinners will not go all-out for the unsold stocks but will go slow in an effort to push prices further lower from the current levels.
On the world front, New York cotton futures maintained their recovery trend for the second session in a row as the maturing July settlement has attained its crucial level of 50 cents per lb after having fallen to as low as 47 cents per lb during the last couple of sessions.
While the maturing July contract recovered another 0.70 cents at 50, the new crop October was quoted higher by 0.95 cents at 53.95 cents per lb.
There was, however, no change in the official spot rates, which were held unchanged at Rs3,025 per maund.
Ready offtake was light totalling about 2,000 bales as under: 200 bales, Shahpur Chakkar at Rs2,350; 1,000 bales, Bahawalpur at Rs2,850; and 400 bales, Chistian at Rs2,900.
The following are Saturday's Karachi Cotton Association (KCA) official spot rates for local dealings in Pak rupees for base grade 3 staple length 1-1/32" micronair value between 3.8 to 4.9 NCL.
