KARACHI, Sept 8: Trading on the cotton market on Wednesday was fairly active as spinners and mills continued to build-up long positions at the current levels to cover their forward positions against foreign sales.
Most of the deals both in Sindh and Punjab varieties were done at the same rates, with the quality of lint in trade being the dominating factor in price fixation, dealers said.
"I don't think prices will fall from the current levels amid reports that the Trading Corporation of Pakistan (TCP) has reactivated over dozen procurement centres both in the Sindh and Punjab cotton belts to intervene if prices fall below the official support price", they said.
However, the chances of the TCP intervention at this stage appear difficult as phutti prices are already on the higher side. But the reports have certainly buoyed both the ginners and the growers as they are expected to get fair price of their produce.
Reports from the world markets are also fairly encouraging as after recent decline, New York cotton futures have again resumed their upward drive despite higher world production, outpacing the annual consumption figure with a wide margin of about 4m bales, brokers said.
New York cotton futures stood firm above the benchmark price of 50 cents at 52.20 and 52.75 cents per lb for both the ruling October and the forward December settlements, up 1.20 and 1.17 cents respectively.
Arrivals of phutti into the ginneries are fairly steady as growers are not inclined to hold onto their stocks owing to uncertain world cotton outlook and fears of fall in prices, brokers said.
Meanwhile, reports coming from the southern Punjab cotton belt, one of the major growing areas, indicate that picking operations have been resumed and lint mostly of fine type will be available during the next couple of sessions.
Official spot rates did not show any change and were firmly held at the last levels in line with those rates at which physical business was done. Ready business was active as till late in the evening about 8,000 bales changed hands, the following being some of the deals:
SINDH VARIETY: 800 bales, Tando Adam at Rs2,325, 400 bales, Shahdadpur at Rs2,350, 400 bales, Pitharo at Rs2,300, and 1,000 bales, Mirpurkhas also at this rate.
PUNJAB VARIETY: 600 bales, Gojra at Rs2,300, 1,000 bales, Sahiwal, 400 bales, Arifwala, 400 bales, Gaggon and 200 bales, Burewala at Rs2,300.
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.
