KARACHI, April 16: Cotton market passed through another dull session on Saturday partly to falling mill and spinner demand and partly to higher price being demanded by some of the ginners who still hold a modest unsold stock of fine lint. Highly erratic price movements on the New York Cotton Exchange are keeping spinners and mills at their toes all the time and they could not precisely decide whether or not go for foreign lint, brokers said.
Moreover, the prices above 50 cents per lb are uncompetitive for the local end-product users as they add to their export parity levels and make textiles more expensive, they said.
“We have to operate in the WTO regime, which has many implications including the quality factors and selling to highly quality-conscious markets including European Union is not that easy”, spinners and mill owners say.
It was perhaps why they were eyeing the TCP stocks and stray fine lots held by some of the leading ginners as they needed a terrible cost cuts to survive in sophisticated market.
A few months back there was a talk of forward deals of over half a million bales made by the leading spinners and textile groups but so far official import figures did not show any addition of a single bale in last year’s import figure.
Cotton analysts said local industry’s consumption this year could touch the high mark of 13m bales against which they had already purchased about 12m bales and sitting pretty comfortable on earlier bought stocks.
They still may need some more supplies but seem to be in no hurry to buy at higher asking prices, they said.
There was, therefore, no change in the official spot rates which were firmly held at the previous level of Rs2,200 per maund.
But New York cotton futures on the other hand failed to extend their previous run-up and fell fractionally by 0.8 and 0.20 cents per lb at 52.06 and 53.14 cents for both the ruling May and forward July settlements respectively.
Ready business was modest totalling about 2,000 bales, mainly from the upper Sindh and the southern Punjab ginneries sold between Rs2,250 and Rs2,300 per maund depending on quality premiums.
