KARACHI, Aug 3: Cotton market on Tuesday resisted fresh decline as ginners raised their asking prices for the new crop owing to an identical increase in phutti rates.
Most of the deals in the new crop both from the lower Sindh and the central Punjab cotton belts were finalized Rs50 higher as compared to a day earlier at Rs2,240 to Rs2,300 per maund respectively.
Phutti rates in Sindh, which have declined to Rs925 being the official support rate, rose to Rs960 per 40 kg followed by reports that some more ginneries in the lower Sindh cotton belt have resumed operations.
"A fair distribution of phutti from the limited ginning units to a higher number has provided the needed manoeuvring leverage to the growers to raise their asking prices", a cotton analyst commenting on the increase in phutti prices said.
He said as the ginners needed more supplies to keep the wheels moving, they willingly accepted the growers demands of higher rates. "The cotton market may again slip into the hands of the growers as it did last season if the mad rush among the ginners to grab the floating stock of phutti continues", he fears.
Last season some of the ginners purchased phutti at all-time peak level of Rs1,750 but failed to sell lint at the higher rates owing to bearish international factors and larger imports by the spinners.
"Textile trade is passing through a terribly bad conditions because of falling world demand for cotton yarn and cloth, the fallout of which is visible on the purchasing capacity of the spinners and mills", market sources said.
They said the current sluggishness will dominate trading until there is some improvement in foreign demand of end-products and an increase in prices. New York cotton futures recovered 0.47 and 0.36 cents at 44.30 and 44.76 cents per lb for both the ruling October and the distant December contracts respectively.
Official spot rates for the new crop were quoted at Rs2,250 per maund, signalling the advent of new crop season. Current crop rates were rung off the board by the KCA. Ready off-take was light totalling about 5,000 bales both in the current and new crop, the following being some of the notable deals:
NEW CROP: 100 bales, Pithero at Rs2,200, 100 bales, Mirpurkhas at Rs2,240, 100 bales, at Rs2,250 and 200 bales, Sanghar at Rs2,250, 100 bales, Qasur at Rs2,350, 300 bales, Sahiwal at Rs2,275, and 100 bales, Chishtian at Rs2,300, 100 bales, Burewala at Rs2,275 and 400 bales at 2,200.
The following are Tuesday's new crop 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.
