KARACHI, June 18: Cotton prices on Saturday were revised upward by the official committee but they are still far below the rates at which the TCP is selling its stocks through weekly auctions.
In Friday’s TCP auction, the response of local mills and foreign buyers was not that encouraging as it has been during the last couple of weeks, as only 2,500 bales could be sold but at much higher rates of Rs2,462 and Rs2,475 per 40 kg out of over 0.1m bales offered for sales.
However, the TCP has asked the local buyers to revise upward their bid prices to match with those of its reference price. It also asked the foreign buyers to raise bid prices to 44 cents per lb, market sources said.
They said relatively poor mill demand reflected that the TCP might not be in a position to get a fair price in the coming auctions, as local spinners might not go all-out as leading among them have already covered their forward positions.
But some others said the local spinners and mills still needed about 0.3 to 0.4m bales to cover their forward positions and might remain big players in the coming auctions. The slowdown in mill buying appears to be a tactical move to forestall further increase in prices, they added.
“The current recovery in New York cotton futures is expected to keep the spinners and mills as an active participant as no one will like to opt for imports in an uncertain foreign market,” says a leading ginner.
Meanwhile, the ginners, notably those who still hold modest unsold stocks, raised their asking prices for the fine lots in line with the TCP and managed to rope in a number of buyers from the Punjab textile zone.
However, details of fresh deals reaching here from the southern Punjab cotton belt indicate that a section of spinners is more interested in buying low-mic lots apparently for blending purposes to lower the cost of yarn to remain competitive in the world markets. There are a few buyers of contamination-free lots.
Official spot rates were quoted higher by Rs25 at Rs2,275, although some of the deals in the ready section were done well above them.
After several lean sessions, New York cotton futures staged modest recovery as both the maturing July and new crop October contracts tended higher by 0.74 and 0.70 cents per lb at 47.38 and 50.00 cents, respectively.
Ready business was modest totalling about 800 bales from various Punjab stations, including 200 bales, Sadiqabad at Rs2,300 per maund.
