KARACHI, May 20: Cotton prices on Friday rose further as ginners held on to their stray unsold stock after a section of spinners resumed local buying. Market sources attributed the current price flare-up to the perception that the ban on some categories of Chinese textiles by the US could well mean greater imports from Pakistan and hence forward covering purchases to meet the fresh orders from their US trading partners.
Official sport rates were revised upward by another Rs25 at Rs2,250 but some of the deals in the ready section were done at Rs2,390, around the TCP benchmark rates. But on the other hand, leading textile groups again opted for the TCP auction of 67,000 bales tenders against which are expected to be opened on May 21 and highest bidders are sure to get a lion’s share.
Cotton analysts said foreign prospective bidders might again remain conspicuous by their absence, as fresh setback in New York cotton futures has changed the future price outlook.
“The steep decline to 50 cents per lb of ruling July contract may have negative impact on the TCP’s reference price as the bidders will evaluate the differentials taking into account overheads,” they said.
During the last three auctions in the current month, the TCP received competitive bids but it is pretty difficult to the same for Saturday’s offer, they added. The interesting feature was that unlike the previous practice, the local market is behaving quite the opposite. While lint price on the local market is rising owing to pressure on ready supplies, New York cotton futures have dropped by five cents per lb from 55 to 50.15 cents.
New York cotton futures on Thursday were quoted lower by 1.65 and 1.00 cents per lb at 50.15 and 51.95 cents for both the ruling July and the new crop October settlements, respectively, on speculative selling followed by a fall in the world demand.
Ready offtake was light as under: 200 bales, Karachi delivery from a southern Punjab ginnery at Rs2,250 and the same quantity at Rs2,275; and 300 bales, Jehnia at Rs2,390 per maund.
