KARACHI, Oct 8: The cotton market on Saturday maintained a bullish outlook as growers have reportedly slowed down the arrivals of phutti into ginneries in an apparent effort to push prices further higher. Lint prices have also risen to seasonal highs in sympathy.
Some of the deals, including a big one in the central Sindh variety, were done as higher as Rs2,425 per maund, and some of the deals in the Punjab variety were also done around this or at slightly higher rates.
Phutti prices have also risen to Rs11 per 40 kg, but most of the growers are entertaining further higher levels and hit their target but it needs a strong holding capacity, market sources said.
During the last couple of sessions, lint prices have risen by Rs200 per maund, sending shock waves among spinners and mills who claim rising prices could knock them out from the international textile markets being most expensive.
A crisis-like situation is developing on the cotton front as all the three major players growers, ginners and spinners could not precisely decided how to look at it, says Naseem Usman, a leading cotton broker.
He said the spinners were haunted by the idea of a short crop, while the ginners were surprised at the holding back of phutti by the leading growers, although they were being offered higher prices.
According to market sources, the Aptma high-ups were planning to discuss the current price flare-up caused by the rumours of a short crop and would urge the government to freeze the prices at the TCP level of Rs2,269 per maund until the size of the crop became clear.
Floor brokers said the mood of major cotton players reflected that each one of them was inclined to outwit other and the consequent mess at the initial stage of the new season.
The future direction of the market will largely depend on the arrivals of phutti into ginneries for the fortnight ending Oct 15. If they are normal, the prices could fall and if they showed further contraction, it may follow a fresh price flare-up.
Official spot rates were further raised by Rs25 to Rs275 per maund, but in physical trading some of the lots were sold at much higher rates.
Ready business was relatively slow as the spinners and mills were not inclined to make fresh commitments at the rising prices and as a result about 3,000 bales changed hands: 1,800 bales, Nawabshah at Rs2,425; 200 bales, Sarari at Rs2,400; and 400 bales, Shahdadpur at Rs2,350 to Rs2,425.
