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February 15, 2006
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Wednesday
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Muharram 16, 1427
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Active buying helps cotton prices to remain stable
By Our Staff Reporter
KARACHI, Feb 14: Cotton prices on Tuesday remained stable around the previous levels as spinners and mills remained active buyers for the quality lots to cover their forward foreign textile sales.
Bulk of the business, therefore, remained confined to fine lots from the upper Sindh and southern Punjab as they are ginned under scientific rules and are considered contamination-free.
But spinners are not paying fixed premium on fine lots under the rules already specified by the government, brokers said but spinners claim it is included in the agreed selling rate.
A couple of years back the government has launched a premium scheme on premium lots to meet the demand of foreign buyers, ginners said but the scheme of contamination-free lint failed to get popular response owing to dispute on quality between the ginners and the spinners.
Floor brokers said the future market trend will be guided by the arrival figures for the next fortnight but ruled out the possibility of any major change in the prevailing prices as spinners are not in a hurry and extending guarded support to keep them within the current levels.
“Spinners are making serious efforts to contain any price flare-up in the backdrop of a lower crop in an effort to remain competitive on the world markets,” they said.
Meanwhile, market did not react bearishly to the recent decline in New York cotton futures and was guided by the local supply and demand factors.
Both the ruling March and the distant May contracts were marked down by 0.81 and 0.78 cents per lb at 55.16 and 56.60 cents per lb, respectively. Bulls target of 60 cents appears to be now a distant possibility.
Local official spot rates on the other hand were firmly held at the last close, although in physical trading some of the deals were done above them.
Ready business was modest totalling about 7,000 bales as under: 2,000 bales, upper Sindh at Rs2,575, 2,500 bales, Rahimyar Khan at 2,550 to 2,575, 1,000 bales, Sadiqabad at 2,525 to 2,575 and 1,000 bales, Ahmedpur East at 2,550.
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