KARACHI, July 5: Cotton market on Tuesday passed through another dull session but some brokers reported inter-mill deals both on cash and kind basis. Some of the leading textile groups having enormous liquid cash at their disposal mostly make extensive buying at the lower levels in the beginning of the crop season and continue to build-up long positions owing to uncertain conditions till the end of the season, brokers said.
Those spinners or mills oblige their counterparts from holding short positions from their stocks by selling them on cash basis at the prevailing rates or help them on the condition that the same number of lots will be returned to the creditor on kind basis from the new crop, they said.
Although some of the ginners still hold stray lots, mostly of fine quality, physical business remained at a low ebb as they were not inclined to sell below Rs2,400 per maund.
“Why should we go for selected lots held by the ginners, while the same type is available from the TCP at much lower rates”, claims a spinner.
On Monday, the TCP has sold well over 90,000 bales of lint below or around Rs2,400 and according to market sources the entire stock under auction was lifted by the mills.
Spinners said despite a steep decline in exports to European Union owing to various factors including dumping duties and falling euro. “We have to keep our stock positions in orders as the post-WTO regime has changed the entire export outlook.”
The textile sector’s annual exports amount to $3.5 billion and the current disruption could cause a major dent in the figure, they said.
It was perhaps in this background that official spot rates were held unchanged at the last levels in the absence of ready business.
