KARACHI, Sept 4: Cotton market on Saturday eased from the recent higher levels as some of the ginners indulged in hasty selling on reports of steep increase in arrivals of phutti into ginneries.
"Cotton prices could ease further followed by predictions of a record crop as the latest arrival figures give a clear idea of the total crop", says a leading ginner "the standing crop is already out of danger of any serious pest attack at this stage".
The limit-fall and highly volatile behaviour of the New York cotton futures during the last couple of weeks reinforce the perception of a near-term bearish price outlook, some others predict.
New York cotton futures on Friday finished, with limit-fall of three cents at 51.00 and 51.58 cents per lb for both the ruling October and the distant December settlements respectively.
According to maiden arrival figures of phutti released by Pakistan Cotton Ginners Association up to Sept 1, 2004, total arrivals showed an increase of 114 per cent at 0.407m bales compared to 0.190m bales the same period last season.
Bulk of the ginned lint, 0.304m bales, has already been lifted by the textile industry, leaving a modest unsold stock of 0.102m with the ginners.
In view of earlier estimates of a bumper crop, spinners unlike the previous season may not opt for hasty imports despite the fact that the government has announced an import duty waiver on lint imports from any of the country, brokers said.
It was in this background that trading on the market resumed around Rs2,350 per maund, Rs50 lower than the overnight rates and steadily moved further as the session progressed but there was no panic selling from any of the ginners.
In sympathy with the decline in lint prices, seed cotton (phutti) prices also fell as most of the deals both in central Sindh and Punjab were done well below Rs1,000 per 40 kg around Rs970 to Rs980.
Meanwhile, reports coming from the ginneries leading and progressive growers are holding back their stocks of phutti because of sharp decline in prices but their weaker links having a little holding capacity are selling at the market rates.
"I fear a standoff on the cotton front if prices of lint or phutti fell further", says a leading broker but he "rules out the intervention of the Trading Corporation of Pakistan (TCP), until phutti prices fall below the support rate of Rs925 per 40 kg".
Official spot rates were upped by Rs25 in line with the overnight average prices.
Ready off-take was modest as ginners were not inclined to sell at the falling prices and held onto their positions. About 5,000 bales changed hands, the following being some of the notable deals;2,000 bales, Shahdadpur at Rs2,350, 1,000 bales, Sanghar also at Rs2,350, 200 bales, at Rs2,325, 200 bales, Shahpur Chakkar at Rs2,315, 1,000 bales, Mirpurkhas at Rs2,300, 800 bales, Sultanabad at Rs2,300, and 200 bales, Khipro at Rs2,325.
Stray lots in Punjab lint changed hands between Rs2,275 to Rs2,375 per maund because of its low-mic.
The following are Saturday'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.
