KARACHI, June 28: Cotton market on Tuesday consolidated overnight gains but ginners were a bit disappointed as the perception of higher price ideas in the backdrop of lower TCP reference price appears to be an elusive goal.
The TCP on Monday held another successful auction for well over 0.1m bales and managed to sell it around its benchmark price of Rs2,400 and above depending on the quality of lint in trade.
The interesting feature was unlike the previous auctions, local mills and spinners managed to buy bulk of the lint on offer as the rates were too attractive at this time of the season, one spinner said.
“An uncertain world price outlook in the backdrop of volatile New York cotton futures, it is advisable to go all-out for the local stuff”, spinners said.
Moreover, the quality of lint procured by the TCP is of fine quality and spinners and mills need it to produce higher counts of cotton yarn for the export markets, they added.
Bulk of the cotton trade is being transacted beyond the cotton market as spinners and mills are opting for TCP lint instead of buying from the ginners around the same rates.
According to official policy, the TCP will stop weekly sales in August and the balance out of 1.6m bales it has purchased during the current season will be kept as buffer stock to meet any emergency on the supply side.
Meanwhile, reports coming from the cotton belt indicate that sowing has been completed in the major areas and the growth of the earlier sown crop is satisfactory and there are no reports of pest attack so far from any part for the cotton belt.
It was in this background that official spot rates were firmly held at the last levels but on the other hand New York cotton futures tended further higher to keep above the 50-cent per lb level.
The matured July and the ruling new October settlements were quoted higher by 0.62 and 0.48 cents per lb at 50.75 and 53.63 cents respectively.
