KARACHI, June 22: The cotton market on Wednesday lacked normal trading interest as spinners and ginners remained locked in a price war in line with the TCP selling rates. The persistent increase in New York cotton futures and their sympathetic bullish impact elsewhere had reinforced the ginner perception of heating up of the local market towards the fag-end of the season, brokers said.
As most of the ginners from central Sindh and Punjab cotton belts have sold their inferior lots well before the current increase in prices, some of the ginners from upper Sindh and southern Punjab still hold stray stocks of fine lots and are said to be eyeing the level of Rs2,500 per maund, they said.
But the spinners and mills appear to be in no obliging mood as they are actively participating in every weekly TCP auction as the lint being offered by it is also of fine quality and contamination-free, they said.
Although the ginners run the risk of lower selling rates at the end of the season after the spinners met their consumption needs from the TCP, they will be forced to sell at the lower levels to clear the backlog before the start of the new season, market sources fear.
Ginners are, however, not worried over the developing situation on the cotton front as in their opinion the unsold stocks are too small to have a negative impact on their liquidity or could cause extensive financial losses to them.
Both the spinners and ginners have, therefore, taken rigid positions on selling and buying prices as the former has some limitations as it has to operate in the post-WTO textile market, they said.
Meanwhile, reports coming from central and southern Punjab, the two major cotton growing areas, indicate that sowing of the new crop has already been completed on the increased acreage. The growth of earlier sown crop is said to be steady.
The KCA rate committee has discontinued quoting rate in 40 kg and is quoting them in per maund for no apparent reason, which could make things a bit difficult for the foreign buyers as they have to opt for a lot of conversions. There was no change in them and were held unchanged at Rs2,325 ex-Karachi.
New York cotton futures on the other hand rose further by 0.57 and 0.46 cents per lb at 48.73 and 51.66 cents for both the maturing July and the new crop October settlements, respectively.
