KARACHI, Aug 19: The cotton market on Thursday maintained a firm trend as prices were quoted further higher by Rs50 to Rs100 per maund followed by reports of a considerable decline in arrivals of phutti into the ginneries and heating up of the international markets.
Most of the deals in physical trading were done at around Rs2,300 per maund as dealers predicted further increase in prices owing to holding back of stocks by the growers.
"The cotton traded is again slipping into the hands of the growers who could exploit it according to their whims," brokers fear, adding "last season they had took the phutti prices as higher as Rs1,750 per maund in the backdrop of damage to the standing crop owing to late pest attack in the Punjab cotton belt.
After having sold lint at Rs3,650 per maund, ginners were trapped last year as higher imports by spinners at much lower rates did not allow any price increase but rather a sharp decline and most of the ginners suffered heavy losses, dealers said.
Reports reaching here indicate that some of the leading growers are holding back their new crop stocks of phutti in an apparent effort to push prices higher from the early week's lower levels, the brokers said.
Both phutti and lint prices had fallen early in the week in line with New York cotton futures and the snap rebound staged by them has a positive bullish impact on the local market, they said.
Market sources said ready off take shrank to modest proportions as the ginners were not inclined to make fresh commitments at the rising prices as they had to keep an export parity level with lint rates.
However, some of the spinners covered positions against their forward sales of cotton yarn and purchased stray lot at around Rs2,300 per maund. As a result, official spot rates were revised upward by Rs35 per maund, but in physical trading most of the deals were done well above them.
New York cotton futures also maintained their upward drive and rose further by 0.75 and 1.05 cents per lb for both the ruling October and forward December settlements at 47.35 and 48.37 cents, respectively.
Ready off take was modest as till late in the evening about 5,000 bales changed hands, the following being some of the notable deals in Sindh type: 200 bales, Shahdadpur at Rs2,275, 700 bales at Rs2,300; 1,000 bales each Tando Adam and Mirpurkhas, 400 bales, Shahdadpur, 200 bales, Sanghar and 400 bales, Pithro at Rs2,300.
The following are Thursday'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.
