KARACHI, May 5: Cotton market on Thursday lacked normal trading interest as spinners and mills remained busy in tender work preparing bids for TCP’s May 7 auction of 60,000 bales. Brokers said that as the unsold stock with the ginners was on the decline and spinners needed more supplies of lint to cover their foreign forward sale of textiles, spinners and mills were keen to buy from the TCP rather than opting for imports.
The TCP tender for 60,000 bales of all lint varieties with minimum average mic and staple length is expected to be participated both by the local and foreign buyers, they added.
Market sources predicted that the TCP was expected to get a fair price despite a substantial fall in international prices as the local lint could still have a competitive edge over its world competitors.
The average cost of the TCP’s procured lint comes to Rs2,400 per 40 kg as against the prevailing world rates of Rs2,600 and after adding other overheads it comes to Rs2,800, they said.
It was, therefore, generally believed that the TCP having large unsold stocks in its kitty, may be one of the chief beneficiaries during the current season as some major producers of lint also need supplies from the foreign sources.
“The May 7 TCP auction is billed very crucial as both local and foreign buyers will try to be on the winning side irrespective of the benchmark price”, some local cotton analysts predict.
New York cotton futures fell further by 0.50 and 0.18 cents per lb for both the ruling May and the distant July contracts at 55.00 and 53.89 cents per lb.
Meanwhile, reports coming from the lower Sindh cotton belt where the crop is sown in February indicate that the its condition and growth is in line with the grower perceptions.
The new crop sowing in the entire belt both in Punjab and Sindh is expected to resume from May 15 and would end on June 15, considered to be ideal time for quality and pest-free cotton.
Official spot rates remained basically unchanged from the previous levels in the absence of falling ready business. Ready business was modest and was confined to stray lots from the Punjab ginneries done around Rs2,150 and Rs2,200 per maund.
