KARACHI, Oct 5: Cotton prices on Wednesday maintained their upward drive on active mill buying triggered by reports of a sizable fall in arrivals of phutti into ginneries amid fears of a short crop.
“A steep decline of about 0.9m bales over the last year’s figure has sent shock waves among both mills and official quarters who were eyeing the crop figure of 14m to 15m bales,” cotton brokers said.
Spinners fear a price flare-up in the weeks to come if the arrival figure did not show a significant improvement for the next fortnight ending Oct 15.
There is a strong rumour in a section of ginners that leading growers are holding on their stocks of phutti to push prices further higher and the crop may not be that short as widely speculated, they said.
“It may be too early to pass on the last word on the size of the crop as the grower is now too wise to be deceived and plans to get a fair price of his product,” ginners said.
The prevailing panic among the spinners and mills, however, could cause a major change in the price outlook in the coming sessions if they resorted to panic buying.
According to official figures released by the Pakistan Cotton Ginners Association for the fortnight ended Oct 1, around 1.273m bales of phutti arrived in ginneries as compared to last year’s figure of 2.1m bales. Out of the total, the mills have purchased 0.922m bales, and exporters 9,000 bales, leaving an unsold stock of 0.343m bales with the ginners.
Major shortfall occurred in the arrival figure of Punjab at 0.565m bales owing to late resumption of picking in southern Punjab and upper Sindh cotton belts, while lower and central Sindh at 0.708m bales was in line with its previous year’s figure, market sources said.
Official spot rates were quoted further higher by Rs35 at Rs2,225 per maund, while New York cotton future were marked down by one and 1.19 cents per lb for at 51.55 and 53.05 cents per lb for both the ruling October and forward December settlements, respectively.
Ready business was on the lower side as compared to the previous several sessions as spinners took breather having an overview of the post-arrival situation. The following are some of the important deals:
SINDH VARIETY: 1,000 bales, Nawabshah at Rs2,290; 400 bales, Kot Lalu, 200 bales, Bucherai and 400 bales, Bandhi at Rs2,290; 600 bales, Sanghar at Rs2,245 to Rs2,250; 100 bales, Mirpurkhas at Rs2,250; and 200 bales, Shahdadpur at Rs2,275.
PUNJAB TYPE: 1,200 bales, Bahawalpur at Rs2,265 to Rs2,300; 600 bales, Vehari, 400 bales, DG Khan, 200 bales, Gojra, 200 bales, Muridwala, 600 bales, Garma Raja, and 200 bales each Mongi Bunglow, Chistian and Haroonabad at Rs2,300; and 200 bales, each Hasilpur and Mamon Kanjan at Rs2,275.
