KARACHI, May 28: Trading on the cotton market on Monday resumed on a listless note as sellers and buyers kept to the sidelines apparently awaiting the release of final crop figures by the Pakistan Cotton Ginners Association late this week.
Although the size of the total crop is already known with minor upward adjustments in the figure released on May 1, spinners seemed to be more interested in the unsold stocks lying with the ginners rather than the total crop, dealers said.
The falling unsold stocks, estimated at 0.2m bales, could cause price flare-up in the sessions to come aided partly by higher world rates owing to speculative buying on the New York Cotton Exchange for the last couple of weeks.In the changing world cotton scenario, notably persistent increase in New York cotton futures has significantly added to the holding capacity of the ginners as the current unsold stocks in no way worried them.
“Of late, the world cotton market is heating up amid supply and demand factor and the local market could hardly be an exception,” said a leading ginner, adding “but the key to future price outlook is with the southern Punjab ginners who hold the bulk of unsold stock”.
Ginners have already raised their asking prices for the fine varieties from the previous week’s Rs2,650 to Rs2,725 at the weekend and some of the spinners lifted modest supplies at this rate.
Some two months backs fine lint prices had touched the high mark of Rs2,850 per maund and leading spinners were buyers at this higher level but permission to import lint from India through the overland route has a destabilising effect on the local market, brokers said.
However, spinners and mills are expected to go slow despite higher New York cotton futures in an apparent effort to keep local prices around the current level of Rs2,700 or slightly above, they said.
Official spot rates were, therefore, again held unchanged at the weekend levels in the absence of any feedback from the ready market.
Ready off-take remained slow, although some of the brokers claimed about 2,000 bales from the southern Punjab ginneries changed hands at unspecified rates.
