KARACHI, July 7: The cotton market on Thursday showed firm trend as official spot rates were raised by Rs25 per maund apparently in line with those at which the TCP is selling its lint in weekly auctions.
But the TCP selling prices for different quality grades are still higher than the official spot rates as they pertain to average quality of lint barring medium staple length fine varieties, brokers said.
In the last Monday’s auction, the TCP accepted most of the bids for 93,000 bales above Rs2,400 per maund, while the official spot rates are still Rs100 below them, they said.
The notable feature was that the TCP managed to sell 14,000 bales to foreign buyers at 48.5 cents per lb, considered a competitive price comparing it with the New York cotton futures. The local lint is sold at a discount of five cent per lb as compared to New York cotton futures because of staple length differential.
At the time of acceptance of the foreign bids on Monday, New York cotton futures were quoted at around 52.00 and 54.00 cents per lb for both the maturing July and the new crop October settlements, respectively.
Unconfirmed reports, however, said some of the ginners from upper Sindh and southern Punjab cotton belts, who still hold modest stocks of unsold lint of fine and contamination-free variety, are sellers at around Rs2,425 or slightly above and some of the spinners are obliging them.
But Wednesday’s steep decline in New York cotton futures could have a negative impact on next Monday’s TCP auction for 85,000 bales, mainly from the Karachi godowns, the spinners hope.
New York cotton futures on Thursday closed 2.04 cents down for the ruling October at 53.29 cents, while the matured July fell by 1.15 cents at 51.10 cents per lb.
On the ready counter, business remained at low ebb, although some of the brokerage houses reported stray lots did change hands as those spinners who are not taking part in the TCP auctions are buying direct from the ginners.
