KARACHI, Feb 24: Cotton prices on Thursday rose further as spinners were not inclined to keep to the sidelines fearing a fresh increase followed by reports of ginner squeeze.
About 20,000 bales, notably from upper Sindh and southern Punjab ginneries changed hands at around Rs2,350 amid reports of pressure on ready supplies, brokers said.
Leading spinners and mills, which have a fair idea of both foreign and local supply position and future price outlook, are out to build up long positions before it is too late and they have paid more, market sources said.
A big deal of 4,000 bales from a southern Punjab ginnery changed hand at Rs2,400 per maund on a deferred payment of two months, which reflects that the spinners have already felt the pinch of rising prices in the weeks to come.
A forward deal at Rs2,400 per maund reflects that spinners and mills have a fair idea of the total crop through their private monitoring and are trying to grab the floating stock at the current levels before an imminent price flare-up. But ginners are also playing their cards credibly well and appear to be in no mood to lower their asking prices, notably for the fine lint of an average micronaire, they said.
Leading cotton analysts predict it would be pretty difficult to contain the possible price flare-up as supply and demand factors will be chief guiding factors in the coming weeks.
Apart from higher world prices, which have made imports more expensive, market talk of lower than originally forecast arrival figures for the fortnight ending Feb 28, was the main factor behind the current run-up.
"Unlike previous sessions, the spinners are not inclined to take even a technical breather as fears of pressure on ready supplies and further increase in prices are haunting them," they said.
It was perhaps in this background that official spot rates were further upped by Rs25 at Rs2,200 per maund but in physical trading prices are much higher. After having risen sharply a day earlier, New York cotton futures suffered a modest fall on late selling, off 0.35 and 0,54 cents at 47.90 and 48.89 cents per lb for both the ruling March and the distant May settlements, respectively.
Apart from the unreported business, the official offtake was light totalling about 4,000 bales, the following being some of the deals: 400 bales, each Sadiqabad and Kabola at Rs3,350; 400 bales, Khanpur at Rs2,300; and 800 bales, upper Sindh also at Rs2,350.
The following are Thursday'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.
