KARACHI, Aug 30: Trading on the cotton market on Monday resumed on a higher note as spinners and mills were obliged to cover their forward positions around the ginner asking prices.
Some of the deals in the central Sindh cotton variety were finalized as higher as Rs2,375, while the average selling rate was higher at Rs2,350 as compared to weekend's Rs2,300.
Floor brokers said central Punjab variety was again traded at discount as compared to its Sindh counterpart, the average rate being Rs2,300. Low-mic of the lint from the central Punjab cotton belt was said to be chief factor behind the lower offered prices, they added.
Market sources said by now spinners had a fair idea of the crop but seemed to be in no mood to entertain bearish price ideas at this stage and continued to lift all the lots offered between Rs2,275 to Rs2,375 per maund.
"Unlike the previous season, no spinner is inclined to take even a calculated risk as far as supply position is concerned", one spinner said adding "to meet an estimated consumption demand of the industry at about 14m bales during the current season each one of us has to be in the market all the time".
Most of the ginners and spinners are trying to cover in part previous losses suffered by them initially owing to steep increase in prices and later because of below market fall in the ruling rates.
Most of the spinners had to import lint totalling 2.173m bales on an average rate of 55 cents per lb and the later fall in world prices below 50 cents per lb has made them uncompetitive on the foreign textile market.
The cotton market is, therefore, still unstable as spinners could not precisely decided how to go for the lint and what should be the average prices, which could cover any future price losses, market sources said.
Meanwhile, reports coming in from the cotton belt indicate that more ginneries have resumed operations during the last couple of session and arrivals of phutti are too small to adequately feed all the ginneries.
And as each ginner is trying to net in the grower after offering higher price of his phutti, ginners are passing on the advantage to the spinners, dealers said. The following are some deals done on Monday:
SINDH TYPE: 1,000 bales, Tando Adam at Rs2,350, 200 bales, at Rs2,375, 900 bales, Mirpurkhas at Rs2,325-2,350, 200 bales, Kot Ghulam Mohammad at Rs2,350, 100 bales, Khipro, 400 bales, Shahdadpur and 100 bales, Sanghar at Rs2,375.
PUNJAB VARIETY: 400 bales, Haroonabad at Rs2,300
The following are Monday'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.
