KARACHI, July 20: Cotton prices on Tuesday maintained their downward drift as spinners and mills remained selective buyers followed by bearish reports from the world yarn markets.
Official spot rates were further lowered by Rs25 per maund depending on the average quality of lint in trade, but some of the ginners from the central Sindh offered to sell their unsold stocks at much lower prices, dealers said.
"The lint is the victim of slack demand as the spinners and mills have curtailed their daily purchases owing to prevailing slump on the world yarn markets and falling prices," they said.
However, some of the spinners prefer to buy new crop lint from the central Punjab cotton belt at much higher rate of well over Rs2,500 per maund. But the prevailing standoff in cotton trade will continue until there is an improvement in the world yarn prices and exports resume under the previously signed contracts, brokers said.
They said the highly volatile price movement of New York cotton futures was a major unsettling factor never allowing the spinners and mills to chalk out their strategy on long-term basis.
Some others claim New York cotton futures, which are stable well below the 50 cent per lb level, could keep world textile trade in turmoil until it bails itself out from the bear speculative squeeze.
New York cotton futures on Monday finished recovered by 0.20 and 0.46 cents per lb at 47.50 and 47.84 cents per lb, respectively. Meanwhile, reports coming from the lower and central Sindh cotton belt indicate that arrivals of new crop phutti are fairly steady and some of the ginners are planning to resume operations during the next couple of sessions.
Rates of phutti are stable at around Rs970 and Rs1,025 per 40 kg both in Sindh and Punjab cotton belts, but growers are not fixing the rates, anticipating increase in prices. Ready offtake was light totalling about 6,000 bales as under:
NEW CROP: 100 bales, Mirpurkhas at Rs2,350; 200 bales, Sahiwal at Rs2,500; and 100 bales, Chichawatni at Rs2,525.
CURRENT CROP: 867 bales, Bucheri at Rs2,200 and 800 bales, Mando Daro at Rs2,150; 2,000 bales, Ahmedpur East at Rs2,500; and 2,000 bales, Nurpur Nauranga at Rs2,400.
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.
