KARACHI, July 13: Cotton prices on Tuesday fell further as ginners tried to get out of their unsold positions but there was no matching buying offers even at the lower asking prices.
Floor brokers said ginners were worried over the developing situation on the cotton front in the backdrop of absence of spinners and mills from the market. "An unsold stock of 0.454m bales is a peanut for the expanding textile sector," ginners say "it can be lifted just in four days if spinners want as it is barely enough for their four-day intake".
Spinners may have their problems after having imported about 2m bales above 60 cents per lb and the current decline in world prices, but they still needed more supplies to see the current season through, they said.
Owing to steep decline in world lint prices, there was a turmoil on the textile market as new import contracts were not being signed by the traditional importers from Pakistan.
Spinners said that leading importers of textiles were awaiting the end of the speculative activity on the cotton market and were not inclined to open fresh letters of credit until prices stabilize around competitive levels.
But ginners are feeling the pinch of financial burden as an amount of Rs5bn is tied to the unsold stocks, limiting their buying operations for the new crop, ginners claim.
Meanwhile, reports coming from the lower Sindh and the central Punjab cotton belts indicated that arrivals of the new crop phutti into the ginneries was fairly steady but not enough to resume ginning operations at this stage.
Ginners of lower Sindh were expected to resume operations on a modest scale by the middle of the next month and the new crop lint would reach the market about a week later.
But reports coming in from the central Punjab cotton belt indicated that some of the ginners had resumed their ginning operations and made forward deal of 200 bales at Rs2,200 per maund for delivery on Aug 15.
Official spot rates were further lowered by Rs25 at Rs2,700 per maund but 400 bales, from a Khipro ginnery changed hands at Rs2,200. New York cotton futures remained under pressure and were marked further down by 1.25 and 1.15 cents per lb to 46.60 and 47.33 cents for both the ruling new crop October and the distant December settlements respectively.
The following are Tuesday'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.
