KARACHI, Aug 17: Active trading was witnessed on the cotton market on Tuesday as spinners were not inclined to take even a technical breather and lifted all the new crop lots offered for sale by the ginners.
Late on Monday evening about 10,000 bales changed hands between Rs2,175 to Rs2,250 per maund depending on the quality of lint and on Tuesday spinners were also active buyers at the lower prices, brokers said.
In physical trading prices further eased by Rs50 per maund as most of the deals on Tuesday were finalized between Rs2,150.00 and Rs2,180. "Unlike the previous season, spinners are in no mood to take risk and have opted for the local supplies rather than falling prices on the world markets", they said.
Last season spinners and mills imported about 2.2m bales of the foreign lint at much higher rates (above 60 cents per lb), which had a negative impact on their export competitiveness in the backdrop of steep decline in world prices.
A considerable increase in daily volume followed by reports of steady arrivals of phutti into the lower Sindh and central Punjab ginneries, reflected that both growers and ginners were also in no mood to sit on the unsold stock, market source said.
But those ginners who still hold stock of the previous crop are worried as bulk of the trading is confined to the new crop and no one including the private sector exporters are inclined to buy it, they said.
"About Rs2bn are tied to the unsold stock of an identical amount of bales, which has curtailed their purchasing power and prompt payments to the growers", they said. Floor brokers said prices could ease further because of higher crop projections for the new season based on reports of no serious pest attack in the entire cotton belt.
Official spot rates were further lowered by Rs25 per maund at Rs2,200 but in the ready section prices suffered fresh setback. New York cotton futures on the other hand showed fractional gains of 0.05 and 0.02 cents per lb for both the ruling October and the forward December settlements at 43.60 and 44.32 cents per lb.
Ready off-take was light totalling about 3,000 bales as under: 800 bales, Mirpurkhas at Rs2,150, 500 bales at Rs2,175, 300 bales at Rs2,200, 400 bales, Shahdadpur at Rs2,200, 200 bales, Tando Adam at Rs2,200, 100 bales each Sanghar at Rs2,175 and Rs2,180.
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.
