KARACHI, Nov 11: The cotton market on Friday finished on a firm note as prices were quoted higher by Rs35 per maund amid an actively traded session. Ready offtake soared to 20,000 bales including some big deals, reflecting spinners’ concern about future expensive supplies and price hike.
Most of deals in the Punjab variety were done between Rs2,425 and Rs2,450 per maund, as the spinners increased their daily intake fearing further increase in prices.
“It appears to be a belated reaction to below market expectations of arrivals of phutti for the fortnight ended Oct 31, 2005,” cotton analysts said. “A decline of about 1.5m bales is a big gap to be bridged during the coming weeks.”
The spinners and mills, which have holding the price line for the last couple of weeks, appear to be on the receiving end as the fears of crop shortfall engulfed the market, they said.
“The price balance now has been shifted to the grower who could raise prices further higher after holding on to their phutti stocks,” they said. “Already phutti prices have risen to Rs1,100 per 40 kg and growers entertain still higher price ideas.”
Phutti prices might not hit the highest level of Rs1,700 per 40 kg three years back they are in for a big turnaround after the arrival for the fortnight ending Nov 15 reach ginneries.
Floor brokers said if prices rose further, the spinners and mills might opt for fresh imports as New York cotton futures have declined to 50.20 cents per lb from 55.00 cents during last couple of sessions, making imports of lint a bit competitive.
“The textile sector has big import orders in hand and could not take the risk of supply gaps or higher prices beyond their export parity levels,” they said. “Already alarm bells have rung in their domain and leading among them may react to maintain a balance in supply and demand.”
After remaining unchanged for the last couple of sessions, official spot rates were upped by Rs35 and dealers predicted fresh increase during the coming sessions.
New York cotton futures on the other hand were marked down by 0.21 and 0.05 cents per lb at 50.20 and 53.55 cents, respectively, on late speculative selling.
Ready offtake was fairly brisk totalling about 20,000 all from Punjab ginneries, the following being some of the notable deals: 6,600 bales from various stations close to Rahimyar Khan at Rs2,425; 2,200 bales, Sadiqabad, 3,000 bales, Khanpur, 800 bales, Alipur, 400 bales, each Hasilpur, Khanewal and Ahmedpur East, 800 bales, Alipur also at Rs2,425; 1,000 bales, Faqirwali at Rs2,400 to Rs2,425; and 2,000 bales, Chinigoth and 400 bales, Khanpur at Rs2,450.
