KARACHI, Dec 6: The cotton market on Tuesday showed a firm trend as official spot rates were modestly revised upward in line with those at which most of the transactions were done.
In the ready section, bulk of the business was done higher by Rs25 to Rs50 per maund, indicating a fresh price flare-up in the coming sessions based on demand and supply factors, brokers said.
An idea of the expected pressure on future supplies may well be had from the fact that spinners and mills made a near-panic buying to grab the floating stock of fine lots from Punjab ginneries, they said.
About 25,000 bales, including some big lots and 5,500 bales from Khanpur ginneries, changed hands at an average higher rate of Rs2,375 per maund. Another big deal was done around Rs2,400.
Ginners and spinners by now have realized the likely positive impact of a short crop on prices in the coming weeks. The latter appears to be more apt to react to the changing world cotton scenario and made hasty buying even at the higher asking prices by the ginners, brokers said.
Another aiding factor behind the future bullish price outlook was reports that the world production of lint could lag behind the global consumption and that could well mean higher lint, they said.
The rebound staged by New York cotton futures reflects that the world cotton scenario has changed and the spinners are adjusting it to maintain the current increased tempo of textile exports, some others said.
According to surveys conducted by some of unofficial agencies, the textile export during the current half year had shown an increase of over 40 per cent, made-ups, cotton yarn and cloth combined.
“The textile sector has to cover a long distance to maintain the export tempo and the needed supplies of raw materials during the second half,” analysts said, adding that the current panic mill buying reflected this perception.
Official spot rates were upped by Rs15 per maund, while New York cotton futures rose by 0.75 and 0.50 cents per lb at 49.05 and 52.27 cents for both the ruling December and the distant March contracts, respectively.
Ready offtake was on the higher side as spinners remained active buyer. About 25,000 bales changed hand from Punjab ginneries as under: 5,500 bales, from Khanpur ginneries at Rs2,375 to Rs2,390; 1,200 bales, Sardar Lund at Rs2,375 to Rs2,400; 2,000 bales, Rajanpur, 1,000 bales, Bahawalpur, 2,400 bales, Nurpur, 400 bales each, Kehror Pacca, Muridwala, 200 bales, Ahmedpur East, 800 bales, Rahimyar Khan, 400 bales, Hasilpur, 200 bales, Uch Sharif, and 400 bales, Kabirwala at Rs2,375; 600 bales, Liaquatpur at Rs2,465; 400 bales, Mian Channu at Rs2,325; and 400 bales, Yazman at Rs2,360.
