KARACHI, April 11: The cotton market on Monday lacked lustre as millers and spinners kept to the sidelines in anticipation of decision being taken by the government for the TCP’s procured cotton. The trading remained listless and there were only small lot buying and selling which mostly of adjustment nature. However, prices remained steady and there were no changes in spot rates. There were strong rumours that the Economic Coordination Committee (ECC) would be taking decision for the mode of sale of the TCP’s held stocks of around 1.6 million bales.
Consequently, it was generally felt that the government this time may allow the TCP to sell cotton in the local market. Cotton analysts feel that if the corporation enters local market it will have great impact on prices.
“It seems that the cotton trade has become the victim of demand and supply and after adding all the figures the cotton market is likely to become buyers market,” observed cotton analyst Naseem Usman.
He said that the TCP was presently holding around 1.6 million bales and private sector, including millers and spinners have already imported around 1.2 million bales and around 0.4 million bales were lying with the ginners.
This means that at present around two million bales with an estimated cost of Rs25 billion are available in the country, he added. Around 100,000 bales have been imported from India. The country paid around Rs15 billion for import of 1.2 million bales whereas there were sufficient stocks of raw cotton.
Karachi Cotton Association Chairman A Shakoor Dada appreciated the government’s move for allowing hedge trading in raw cotton. He said that in the wake of WTO regime, it has been necessary to resume hedge trading in cotton at the earliest, particularly for reducing price volatility and mitigation of risk for all sectors of the cotton economy.
Till late afternoon on Monday small lot business was being transacted but most of the deals were not changed hands.
