KARACHI, Dec 17: The cotton market on Saturday witnessed with a bit surprise larger than expected arrival figures of phutti into ginneries and leading players tried to tilt the price balance in their respective favour but it is too early to expect any change in the prevailing mechanism, analysts said.
According to official figures released by the Pakistan Cotton Ginners Association, for the fortnight ending Dec 15, total arrivals showed an increase of 1.638m bales at 10.419m bales as compared to the previous fortnightly figure of 8.781m bales. Out of which, the spinners have purchased 7.359m bales, leaving an unsold stock of about 3m bales with the ginners, which well over Rs30 billion of ginners are tied to them.
Market sources said the growers, to a great extent, were out of the market after having sold bulk of their produce but the ginners may be trapped in between if rates did not show an upward movement in the coming sessions.
“Both the perception of a large crop amid earlier talk of a short one and higher unsold stocks could prove a double-edged weapon for the ginners,” cotton trade analysts said. “Ginners seem to be working on the figure of 12m bales plus, but if the current pace of arrivals was maintained the total could swell well beyond it.”
But some others said it was too early to speculate about the future price outlook in the changed supply and demand scenario but one thing was clear that the spinners and mills will be more than happy if the crop figure touched the high mark of 14m bales plus, as they still have to go a long way to see the year through.
However, there was a relative calm on the market as most of the deals in the ready section were done around the previous levels, but brokers said the market reaction would be around next Monday after trading resumes.
Official spot rates were again held unchanged at Rs2,400 per maund but on the other hand, New York cotton futures staged a modest recovery at 53.39 and 54.23 cents per lb, up 0.38 and 0.47 cents for both the ruling March and the distant May contracts, respectively.
Ready offtake was active well over 15,000 bales, mostly from Punjab ginneries, the following being some of the notable deals: 2,600 bales, Rahimyar Khan, 1,200 bales, Ahmedpur East, 1,000 bales, each Alipur, Sadiqabad and Gothki, 1,500 bales, Rohri, 2,000 bales, Uch Sharif, 400 bales, each Bahawalpur and Jahania at Rs2.425; 400 bales, Mailsi at Rs2,380; and 400 bales, Bahawalnagar at Rs2,350.
