KARACHI, Nov 13: Pre-holiday mood prevailed on the cotton market on Saturday as both buyers and sellers kept to the sidelines exchanging pre-eid greetings sans physical trading.
The market closed for three Eid holidays, and is expected to reopen on next Thursday and that could well prove the turning point in its future direction in the backdrop of higher local crop ideas and about 2m bales increase in the US cotton production, dealers said.
Selling rates for both the Sindh and the Punjab lint were again quoted at Rs1,800-1,925 and Rs1,900-1,950, respectively, but no physical deal was reported owing to delivery problems.
Phutti rates remained steady between Rs850-925 per 40 kg but growers were said to be reluctant sellers at the offered prices apparently anticipating further increase in the post-eid trading, brokers said.
Although opinions are divided over the future market direction, some analysts said the arrival figures of phutti for the fortnight ending Nov 15, which are expected to be released after eid could prove crucial.
"If there is an increase of 2m bales on the pattern of last fortnight, pushing the figure to 8.2m bales, there could be some terrible upsets on the price front", some analysts fear adding "in that case the TCP may not be in a position to play the role of market stabilizer".
Spinners and mills are claimed to be fully booked for the quarter ending Dec 31, 2004 and beyond, they may welcome any bullish signal from the production front as it could well mean lower prices, they said.
Meanwhile, there was an apparent lull on the cotton trading, although some of the leading brokers reported deals for stray lots for prompt delivery to some of the local mills.
But on the other hand reports coming from the southern Punjab and central Punjab cotton belt indicate a fair amount of bales have changed hands, details of which were not sent to the KCA or leading brokerage houses.
There was no change in the official spot rates in the absence of ready business, which were quoted unchanged at Rs1,920 per maund. New York cotton futures on the other hand again showed divergent trend and while the ruling December rose by 0.46 cents at 44.34 cents per lb, the distant March fell by 0.13 cents at 42.85 cents per lb on selling prompted by reports of higher US production.
On the export front, private sector exporters have registered 0.141m bales with the Export Promotion Bureau (EPB) up to Oct 31, 2004, which also included 46,089 bales of the old crop.
Total shipments against the firm deals totalled 6,929 bales in August and 16,176 bales in September so far, according to official figures. Ready business was light as about 3,000 bales changed hands in the southern Punjab cotton belt around Rs1,900-1,950 depending on the quality of lint.
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.
