KARACHI, Sept 7: The cotton market on Wednesday showed firm trend as official spot rates were quoted further higher by Rs25 per maund on active mill demand at the current levels. But most of the deals, notably in the Punjab variety were done well above them partly owing to ginners’ reluctance to lower their asking prices and partly to higher rates at which phutti is being delivered to the ginners.
A steep rise in New York cotton futures of about two cents per lb was another aiding factor, allowing the ginners to raise their asking prices for the second session in a row. Dealers attributed the price flare-up in New York cotton futures to reports of damage caused to the standing crop by the recent hurricane, which could lower the total production by a million bales.
Both the ruling October and forward December settlements were quoted higher by 1.98 and 1.93 cents per lb at 50.45 and 51.78 cents, respectively, making competitive imports from the US a bit higher, they said.
“After having fallen to seasonal lows, the market is heating up progressively amid reports of damage to crop by the last month’s floods in some of the areas in the Punjab cotton belt,” analysts said. “The damage may not be that extensive but some of the leading ginners made it look so.”
However, according to official sources, the crop may suffered modest fall from the target of 15m bales, but is expected to be on the higher side as compared to the last year’s total output of 14.4m bales.
Meanwhile, reports coming in from the lower Sindh cotton belt indicate that the growers are holding back their stocks of phutti in an apparent effort to push prices higher from the current level.
Already, some of the ginners are inclined to buy phutti above the official support price of Rs975 per maund and the increase is passed on to the spinners.
Ready offtake was active totalling about 7,000 bales, the following being some of the notable deals:
SINDH VARIETY: 1,200 bales, Shahdadpur at Rs2,135 to Rs2,150; 1,100 bales, Mirpurkhas at Rs2,075 to Rs2,125; 1,000 bales, Tando Ghulam Muhammad at Rs2,135; 600 bales, Sanghar at Rs2,090 to Rs2,125 and 200 bales, Shahpur Chakkar at Rs2,100.
PUNJAB TYPE: 800 bales, Chichawatni at Rs2,250; 200 bales, Pul Bagar at Rs2,200; 200 bales, Hasilpur at Rs2,240; and 200 bales, Muridwala at Rs2,250.
