KARACHI, Oct 14: Cotton market on Friday recovered from the overnight lower levels as ginners raised their asking prices after growers increased prices by Rs50 per maund.
The decline of Rs175 per maund during the last two sessions was attributed to selling by the ginners on reports of higher crop, allaying fears of a short crop as speculated by some relative textile quarters, brokers said.
But the recovery was caused both internal and external factors and holding back of phutti stocks by the leading and some progressive growers to push prices further higher from the current levels.
“The market’s volatile stance will continue during the next couple of sessions until the arrival figures of phutti for the fortnight ending Oct 15, are released by the Pakistan Cotton Ginners Association (PCGA)”, market sources said.
But much will depend on the attitude of leading growers whether or not they flood the ginneries with fresh stocks or prefer to hold on to their unsold positions for the next couple of weeks, they said.
“Crop may not be that short as being speculated by some quarters”, official sources said “delayed resumption of picking operations of phutti in some areas of the Punjab for various reasons caused the decline in arrivals rather than any other factor”.
The underlying sentiment in part was also influenced on the higher side followed by reports of bullish trend on the New York cotton futures on strong speculative support aided by reports of pressure on forward supplies and damage to US crop.
Most of the deals in Sindh types were finalized between Rs2,350 to Rs2,375 per maund, while Punjab varieties was traded according to quality premium an average rate being Rs2,400.
Although phutti prices were ruling fairly steady around Rs1,100 per 40 kg, growers are holding on to unsold positions until the size of the crop is available and seek further higher levels, dealers said.
Official spot rates were, therefore, revised upward by Rs50 per maund, recouping in part some of the losses suffered during the last two days.
Ready off-take was light totalling about 5,000 bales, owing to higher asking prices and mainly confined to Sindh type. Following were some notable deals: 400 bales, each Tando Adam and Shahdadpur at Rs2,350 and Rs2,375, while about 2,500 bales, of Punjab were done around Rs2,400 to Rs2,425.
