KARACHI, Sept 10: Easier conditions prevailed on the cotton market on Saturday as spinners and mills kept to the sidelines anticipating further fall in the prices. Official spot rates were, therefore, again lowered by Rs25, reflecting an erratic price movements for the last couple of sessions amid alternate bouts of buying and selling.
Most of the deals in the ready section were confined to the Sindh variety, while no official transaction was reported in the central Punjab type for the second session in a row as ginners were not inclined to sell at the lower rates and were holding onto their stocks.
Floor broker said that there was no new destabilizing factor to which the market’s volatile performance could be attributed to, except falling mills demand and weak New York cotton futures.
“The recent spell of late monsoon rain in the Sindh cotton belt could disrupt picking operations of phutti, which could lead to lower arrivals into the ginneries at least for the next week,” they said and added “the lesser arrivals of phutti always fuel a price flare-up on the cotton market”.
They said that the current fall in lint prices was not backed by objective conditions on the supply side, which pointed to the falling mill demand and the absence of leading spinners from the market.
Spinners said that a considerable decline in yarn demand and prices on the world markets forced them to curtail their daily intake as they had already purchased over a million bales from the TCP.
Although the current prices of local lint are very attractive but slowdown in the yarn exports has limited our buying capacity to a certain level, some others said.
New York cotton futures suffered fresh fall of 0.32 and 0.06 cents at 50.05 and 51.95 cents per lb for both the ruling October and the forward December contracts respectively, which in turn had a bearish impact on the local prices.
Meanwhile, there was a relative calm on the export front owing to pressure on supplies. The private exporters have registered export deals with the Export Promotion Bureau (EPB) during the last month totalling 13,115 bales of old crop.
Ready off-take was modest around 2,000 bales, all from the Sindh ginneries as under: 200 bales, Shahdadpur at Rs2,140, 400 bales, at Rs2,150, 200 bales, Shahpur Chakkar at Rs2,130, 400 bales, Nayabad at Rs2,130 to Rs2,140 and 200 bales, Mirpukhas at Rs2,115.
