KARACHI, July 14: The cotton market on Thursday showed firm trend as ginners were not worried over the fresh decline in New York cotton futures and steadily held on to their positions. The perception that the fall in New York cotton futures for the ruling October delivery below the benchmark price of 50 cent per lb at 49.60 could have negative impact on the world cotton trade, brokers said.
“We are least worried over the either-way movement of New York cotton futures as most of us are holding on to workable positions possibly being quite safe from the world price fluctuations,” the ginners said.
But there could be some negative fallout on the TCP auctions, as foreign investors may not be in a position to match its selling rates because of the decline in New York cotton futures, they fear.
After having sold about a million bales to both local and foreign buyers, the TCP still holds an unsold stock of 0.6m bales in its godowns and may not get a competitive price for its future auctions if New York cotton futures fall further, they adds.
Local spinners may also await further developments on the world cotton front after having all-out for the TCP stuff during the last three months, although they may not think of imports, as leading among them have already their kitty full for annual consumption.
But some others predict that the spinners may be active buyers after the TCP lowers its reference price in line with the New York cotton futures in its coming auctions.
On average, the spinners and mills have purchased about 8m bales from the TCP during the last three months, more than enough for their local consumption needs and inter-mill selling.
New York cotton futures suffered a fresh setback of 0.55 and 0.45 cents at 49.60 and 51.56 cents per lb for both the ruling October and forward December contracts, respectively.
In the absence of details of ready business, official spot rates were held unchanged at the last level of Rs2.325 per maund.
