KARACHI, Jan 10: Trading on the cotton market on Monday resumed on a firm note as ginners were not inclined to lower their asking prices and held on to their unsold positions entertaining further increase in prices.
Prices appeared to be heading for Rs2,200 per maund level after fine lots already having traded around Rs2,150 in Monday's physical trading. The cotton outlook appears to have undergone a major change as predictions of further easing of prices in the backdrop of all-time high production record did not prove correct and spinners and mills have to resort to panic-buying to cover their forward positions.
"Credit for holding price line goes to the leading ginners who perhaps have a fair idea of supply and demand factor", says a leading broker adding "the presence of TCP as a second buyer was another aiding factor".
Although ginners still hold a sizeable unsold stocks of well over 2m bales, there is no panic or thinking to get out of the market around Rs2,200 per maund, some others said.
They said most of the spinners including the leading groups failed to assess the developing situation on the supply and demand fronts, hoping a panic ginner selling after the arrival figures of phutti for the fortnight ended Jan 1, but ginners knew that spinners have to go a long way to cover their forward consumption and held on to their stock rather than selling them at the lower prices.
That was perhaps why during the last couple of sessions, prices of premium lots were being quoted higher by Rs200 to Rs300 per maund and spinners and mills were willing to buy at higher rates, market sources said.
Meanwhile, local brokers fear some delivery problems during the next couple of sessions owing to proximity of Eidul Azha as cargo-haulers will prefer to transport sacrificial animals from the upcountry trading centres to the city at much higher rates.
"Whether or not this shift force ginners to lower their asking prices will be seen during the next couple of sessions", dealers said. Official spot rates were quoted further higher in line with the ready rates and were quoted at Rs2,025 per maund.
Ready off-take was modest owing to higher asking prices and totalled about 10,000 bales during the last two sessions, mostly from the upper Sindh and southern Punjab cotton belts.
Some of the private sector exporters were also buyers of inferior lots around Rs1,800 or slightly above and lifted stray lots from the central Sindh ginneries.
The following are Monday'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.
