KARACHI, July 27: Active trading was witnessed on the cotton market on Tuesday as spinners lifted all the lots offered for sale by the ginners at the lower rates.
"Disappointed by a positive official response to their requests to end the current standoff caused by higher unsold stocks, ginners opted for panic selling to clear the carryover stocks before the arrival of the new crop," brokers said.
An idea of panic selling may well be had from the fact that some of the southern Punjab ginners who have steadily been holding on to their unsold positions for the last couple of weeks lowered their asking prices as low as Rs2,075 per maund in apparent bid to get out of the market, they said.
They said spinners appear to be in an obliging mood and bought about 10,000 bales including some big-lots, the highest rate paid was Rs2,410 per maund. "Uncertain world price outlook in the backdrop of limit-fall in the New York cotton futures for the last several weeks has sent bearish signals the world over and local ginners could hardly be an exception," they said.
New York cotton futures finished with limit-fall of 2.14 cents per lb for the ruling October delivery, while the forward December contract fell 1.58 cents at 44.31 and 45.04 cents per lb respectively.
Cotton analysts said higher world production of 102m bales as compared to total consumption of 99.07m bales could keep world prices at the lower levels as leading consumers, including China and the US are expected to harvest a record crop during the year 2004-05.
According to initial crop reports the growth of the local crop is in line with the official projections and expected to meet the local demand, they said. Meanwhile, the highups of the Pakistan Cotton Ginners Association (PCGA) are in session in Multan to chalk out a marketing strategy for the new crop and dispose of the unsold stock of the current crop.
Official spot rates were firmly held at the last close but in the ready section most of the deals were finalized according to quality premiums. Ready off-take was active as till late in the evening about 10,000 bales, changed hands, the following being some of the notable deals;
NEW CROP: 200 bales, Mirpurkhas at Rs2,400.
CURRENT CROP: 200 bales, Chingoth at Rs2,450, 3,000 bales, Ahmedpur East, 1000 bales each at Rs2,075, 2,250, and 2,375 and 400 bales at 2,400, 1,100 bales, Jalalpur at 2,375 and 400 bales, Galiwali at 2,410.
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.
