KARACHI, Aug 25: Cotton prices on Thursday rose further as some of the spinners and mills holding short positions against their forward foreign sales of textiles remained active buyers around the current levels.
However, lower Sindh varieties were traded below the official spot rate between Rs2,265 and Rs2,275 per maund, central Punjab lint was sold well above them because of quality factor and staple length, brokers said.
But New York cotton futures on the other hand again came in for active profit-selling at the recent rise and ended modestly lower, off 0.67 and 0.58 cents at 47.00 and 48.67 cents per lb and managed to hold on the recent gains, they said.
“Owing to conflicting reports about the size of the new crop, spinners are bit worried and could not precisely decide how to react”, analysts said and adding “leading among them who had already covered their forward positions after having purchased bulk of the lint offered by the TCP for local and foreign sales were not worried about the future supply outlook”.
But, those who did not take part in TCP auctions and preferred to opt from new crop resumed mopping operation and the consequent increase in prices, they said.
Official warning to the growers about a possible pest attack at the flowering stage in the main cotton belt and the call for appropriate corrective steps including fertilizer spraying seem to have sent negative signals in the textile sector, market sources said.
What seems to have caused the recent price flare-up was a report from the Punjab-based sources that the crop target of 15m bales may not be achieved owing to damage to crop followed by early advent of monsoon, they added.
They said that as most of the leading spinners and mills were said to be fully booked on the export front for the quarter ending December 31, 2005 and at the competitive prices, they were not worried about the price flare-up as they could stay out until prices fall.
It was perhaps in this background that official spot rates were upped for the third consecutive session by Rs25 at Rs2,300 per maund.
Ready off-take was active totalling about 5,000 bales as under:
SINDH NEW CROP: 1,000 bales, Mirpurkhas at Rs2,265 to Rs2,275, 1,200 bales, Shahdadpur, 600 bales, Tando Adam and 100 bales, Sultanabad at Rs2,275 and 400 bales, Sanghar at Rs2,265.
PUNJAB VARIETY: 200 bales, each Pakpattan and D.G. Khan at Rs2,375, 200 bales, Chistian and 300 bales, some other stations at Rs2,400 and 200 bales, Burewala at Rs2,410.
