KARACHI, Sept 21: Cotton market on Tuesday crashed as ginners indulged in hasty selling as the perception of negative fallout of higher crop estimate continued to haunt them.
An idea of falling prices may well be had from the fact that some of the deals in Sindh type were done well below the Rs2,000 per maund amid an actively traded session. Punjab varieties, known for their better staple length, were also fell to as low as Rs2,100 per maund.
About 2,000 bales, from Shahdadpur and some other stations were sold at tw0-year low level of Rs1.850 to Rs2,000 per maund. Phutti prices also fell below the official support level of Rs925 to Rs880 to Rs925 depending on the quality. The TCP high-ups are reported to be holding meetings to enter the market to protect the interest of the growers, brokers said.
"There is confusion on the cotton market as both the ginner and the grower could not precisely decide how to react to higher crop ideas," broker said adding "but on the other hand spinners and mills are happy over the recent developments and continued to build-up long positions at the falling prices".
Apart from higher crop prediction, the other destabilizing factor appears to be volatile performance being turned in by the New York cotton futures and its sympathetic negative impact elsewhere.
There is no word on the developing situation from the official sources or the TCP, which is awaiting signal from the government to come to the aid of grower to support the falling market.
"Ginners may not be at the receiving end as they sell lint based on the phutti rates, but growers are selling in panic amid rumours that prices could fall further," market sources said.
Meanwhile, reports coming from the entire cotton belt indicate that most of the ginneries in the southern Punjab and the upper Sindh have resumed operations but unlike the previous season, no one among them is adhering to the standard of contamination-free lint.
Last season, spinners and mills did not pay them agreed premium of Rs200 per bale for the contamination-free lint. Official spot rates were lowered by Rs75 per maund, while New York cotton futures also suffered fresh fall of 0.86 and 1.02 cents at 49.35 and 47.41 cents per lb respectively. Ready off-take was active as till late in the evening about 50,000 bales changed hands, the following being some of the notable deals:
SINDH TYPE: 1,000 bales, Sanghar at Rs2,000, 400 bales, Khipro at Rs1,950, 1,000 bales, Sanghar at Rs1,850, 1,000 bales, Nawabshah at Rs2,125 and 1,000 bales, Shahdadpur also at this rate. About 30,000 bales from the Punjab ginneries changed hands between Rs2,000 to Rs2,175 per maund.
The following are Tuesday'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.
