KARACHI, June 30: Quieter conditions prevailed on the cotton market on Thursday as the physical centre of trading has shifted to the TCP headquarters where spinners and mills are the sole buyers.
“The TCP appears to be in a bit hurry to dispose of its stocks of lint as it has quickened the pace of auctions twice a week”, brokers said “the increase in auctions one after the other reflects that it is out to meet the official deadline of Aug 14”.
The government has directed the TCP high-ups to complete the sales by Aug 14, after having left a sizable number of bales as a buffer stock to meet any shortfall.
Floor brokers said spinners and mills were all out to grab the TCP lint, which is of fine variety, and in the last two auctions they had purchased bulk of bales in trade.
With foreign buyers remaining on the sidelines owing to price factors, spinners and mills are eyeing to buy all the lots offered for sale by the TCP below Rs2,400.
“Any rate below Rs2,400 per maund suits our export parity level,” spinners said, and added “our current covering operations are aimed at building up strong supply line against heavy demand of our textiles in the western markets”.
The TCP has also announced the second auction of 80,000 bales for this week possibly on Saturday and mills are happy over the TCP’s quick auctions.
Spinners said the current pace of TCP sales reflected that the local lint was enough for the textile industry before the arrival of the new crop and we might not opt for further imports.
Out of the total 1.6m bales, the TCP is expected to leave a buffer stock of 0.6m bales with it. Market sources said the balance was expected to be sold to China after ascertaining a good new crop.
New York cotton futures recovered from the overnight lows as both the matured July and the ruling October settlements were quoted higher by 1.45 and 1.14 cents per lb at 50.80 and 53.40 cents respectively.
There was, however, no change in the local official rates, which remained static at Rs2,300 per maund.
