KARACHI, July 26: The cotton market on Wednesday showed steady trend, as prices of new crop lint were quoted higher by Rs25 per maund followed by reports of slow arrivals of phutti into ginneries because of fresh rain.
Stray lots of new crop changed hands at around Rs2,500 per maund for ready delivery, as ginners of the central Sindh cotton belt raised their asking prices. Arrivals of phutti virtually dried up as picking operations remained suspended since Sunday because of rain.
Ginners said cloudy weather in the lower Sindh cotton belt and a fresh bout of rain might further delay the picking operations in most parts of the lower and central Sindh cotton belts and that might lead to further heating of the market.
Indications are that spinners and mills may not buy lint at the higher asking prices or above their export parity levels, as an alternative source of supply through the TCP tender is there, market sources say.
Bids against the recent TCP tender for 36,000 bales was expected to opened today (Thursday), and the future market trend would be guided by the lowest and the highest prices offered by the spinners and mills or foreign buyers, they added.
However, the TCP tender did have a negative impact on the local market operations, as the spinners and mills remained busy in the tender business.
Meanwhile, reports reaching here from the upper Sindh cotton belt indicate that the current monsoon rain is beneficial for the growth of the crop in the areas, and the possibility of breeding of pest during the post-rain period owing to warm weather was also ruled out.
According to official sources, some of the private exporters had registered export contracts for 3,000 bales with the Export Promotion Bureau. The total forward sales up to July 23 rose to 0.180m bales against which shipments are being made by the exporters.
Official spot rates were, therefore, firmly held at the overnight level of Rs2,500 and some of the deals in the ready section were done around this level.
New York cotton futures on the other hand suffered a modest fall of 0.75 and 0.77 cents at 53.40 and 55.18 cents per lb for both the ruling October and the distant December settlements, respectively.
Ready business was light totalling about 1,000 bales in new crop Sindh cotton belt, including 100 bales Tando Adam at Rs2,485 and Rs2,500 per maund.
