KARACHI, June 17: Quieter conditions prevailed on the cotton market on Friday as leading spinners and mills adhered to the sidelines most of the time, awaiting the outcome of their bids against the TCP tender. The Trading Corporation of Pakistan has offered to sell in its weekly auction on Friday (June 17) 60,000 bales, mostly from its Karachi godowns, to both local mills and foreign buyers, which will raise the total of its sales so far to half a million bales.
According to unconfirmed reports, the TCP had accepted most of the offers, with the exception of a few, who had been advised to raise their bid prices to match those of its reference price, brokers said.
But some others said that in the backdrop of falling world markets and fears of further slump in cotton prices before the arrival of new crop, the TCP high-ups were not inclined to take risk and sold the lots to those buyers who offered competitive prices sans New York cotton futures.
Owing to medium staple length and in some case low-mic, Pakistani lint is generally sold at a discount of five cents per lb as compared to fine varieties with longer staple length, market sources said.
However, the corporation during the current cotton season has generally procured fine export quality and contamination-free lint and that is perhaps why it is fetching a fair price both from the local and foreign buyers, they added.
Both the TCP and the spinners are trying to have their stock positions in order before the deadline of Aug 14, when the former will stop sales to keep the balance as a buffer stock, brokers say.
There are also rumours that the government may sell about half a million bales on country-to-country basis after keeping a buffer stock of about 0.3 to 0.4m bales to meet any crop shortfall during the next season, they said.
Official spot rates consolidated the overnight gains and were held unchanged, while New York cotton futures suffered a modest decline of 0.43 and 0.08 cents per lb for both the maturing July and October contracts, respectively, at 46.64 and 49.30 cents.
About 700 bales of inferior type of lint from the central Sindh cotton belt changed hands below Rs2,200 per maund.
