KARACHI, May 11: Trading activity on the cotton market on Friday was a bit slow as both ginners and spinners kept to the sidelines apparently analysing the negative and positive impact on the local prices after the Indian lint found its way into the local consumption channels.
World cotton prices rose after the government announced that Pakistan would need to import about 3m bales of lint to makeup the local crop shortfall and would enter foreign markets any time to make forward buying, dealers said.
Spinners are, however, terribly optimistic and happy as the government has met their long-standing demand though a bit late, leading broker Naseem Usman said, adding “but it is too early to say this decision will send local prices sharply lower”.A saving of Rs200 on freight account alone on import from India through an overland route could significantly reduce our production cost in future, making exports of textiles more competitive, some others said.
But ginners are least worried on the permission as most of them had already exhausted their unsold stocks and at better price, said a leading ginner, adding that disposing of an unsold stock of about 0.3m bales at competitive rates is not a big problem.However, ginners are expected to dispose of their stocks well before the arrival of Indian lint, market sources said.
They said psychological impact on the ginners holding bulk of the unsold stock of lint would felt but the Indian lint may not be that cheaper as widely speculated after having added other overheads barring saving on the freight account.
A section of spinners and mills still prefer to buy local lint instead of opting for imports for a number of reasons including lack of expertise on the import front, although some of them purchase modest lots from the leading local trading partners, they added.
Official spot rates were firmly held at the previous level of Rs2,675 per maund amid slow activity.
New York cotton futures on the other hand rose by 0.21 and 0.20 cents per lb at 49.03 and 52.05 for both the maturing May and the ruling July contracts respectively.
Ready offtake was light as about 1,000 bales changed hands. The following being some of the notable deals: 400 bales, Shahdadpur at Rs2,600, 200 bales, Gilawali at Rs2,700 and 200 bales, Vehari at Rs2,625, all low-mic lots.
