KARACHI, Sept 1: Active trading was witnessed on the cotton market on Wednesday as spinners and mills were not inclined to take even a technical breather fearing further increase in prices.
Fresh limit-gain in the New York cotton futures for the second consecutive session on strong speculative squeeze appears to be the chief inspiring factor behind the local price run-up, dealers said.
About 10,000 bales, mainly in the Sindh variety owing to its better quality, changed hands at an average rate of Rs2,450 per maund, but some of the central Punjab type lots were sold at the lower rates because of quality factors including low-mic, they said.
Floor brokers said despite reports of a good crop, near-term price outlook appeared to be a bit bullish as was reflected buying by the spinners and mills irrespective of the current price flare-up.
"The local market is apparently being guided by the bullish trend on the New York Cotton Exchange and spinners who have to operate in the international markets fully know its negative fallout elsewhere", says a leading spinner.
But it pretty difficult to convince our foreign trading partners that an identical price increase is inevitable but most of them seldom oblige, he adds. As a result, there is a temporary halt in the opening of fresh LCs and the consequent piling up of unsold inventories, he adds.
The near-panic buying by the mills irrespective of the asking prices reflects that unlike the previous seasons no one among them is inclined to take even a calculated risk and picks up all the lots offered.
Official spot rates were, therefore, further raised by Rs75 maund to Rs2,375 a maund, though in the ready section most of the deals were finalized well above them. New York cotton futures were quoted further higher by 2.90 cents each at 53.00 and 54.38 cents per lb for both the ruling October and the distant December settlements respectively. Ready business as brisk as till late in the evening about 10,000 bales changed hands, the following being some of the notable deals:
SINDH VARIETY: 200 bales, Nayabad at Rs2,450, 400 bales, Mirpurkhas at Rs2,400, 200 bales, Sultanabad at Rs2,425, 1,000 bales, Shahdadpur at Rs2,450, 200 bales, Sanghar, 800 bales, Tando Adam, 400 bales, Sanghar, 200 bales, Hyderabad, at Rs2,450 and 200 bales, Khipro at Rs2,400.
PUNJAB TYPE: 400 bales, Sahiwal at Rs2,400, 200 bales, Pakpattan at Rs2,450, 400 bales, Bismallahpur at Rs2,400, 600 bales, Muridwala at Rs2,400 and 200 bales, Gojra also at this rate and 200 bales, Chichawatni at Rs2,425.
The following are Wednesday'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.
