KARACHI, Sept 26: Brisk trading was witnessed on the cotton market on Wednesday as spinners and mills continued to build up long positions at the current levels amid fears of fresh price flare-up.
But in physical trading late in the evening prices eased by Rs25 to Rs50 per maund as some of the ginners tried to clear backlog after steady arrivals of phutti into the ginneries, floor brokers said.
Most of the deals in the ready section on Tuesday evening were finalised at uniform rate of Rs3,000 per maund for both Sindh and the Punjab types.
On Wednesday the price differentials based perhaps on quality premiums were more visible as some of the deals in Sindh type was done as low as Rs2,875 as compared to previous day’s Rs3,000. About 400 bales of Mirpurkhas was traded at Rs2,875 and 600 bales, Sanghar at Rs2,900.
“The highly volatile performance of the cotton market reflects that there are may be two opinions about the size of the crop and spinners seem to be in no mood to take risks at this stage in regard to their annual consumption needs,” cotton analysts said.Spinners and mills are also worried over the rising prices of New York cotton futures despite higher crop ideas in the major cotton producing countries, which spinners fear may cause sympathetic increase in the local prices in the coming weeks irrespective of talk of a 15m bales crop, they said.
Market sources said the current panic buying by the mills and spinners could send prices further higher in the coming weeks unless a balance between supply and demand is achieved.
About 20,000 bales changed hands including some big-lot as leading spinners and mills tried to corner the floating stock below Rs3,000 per maund amid market talk of an imminent price flare-up, floor brokers said.
Official spot rates were revised upward by Rs25 per maund at Rs2,875 in line with those at which deals were finalised in the ready section.
New York cotton futures on the other hand showed a fractional fall of 0.16 and 0.15 cents per lb at 63.08 and 66.08 cents for both the ruling October and forward December contracts respectively.
The following notable deals were reported by the brokers on Wednesday evening.
SINDH VARIETY: 1,500 bales, Mirpurkhas at Rs2,900 to Rs2,950, 1,200 bales, Sultanabad at Rs2,900 to Rs2,910, 1,600 bales, Shahdadpur at Rs2,950 to Rs3,000, 1,200 bales, Tando Adam at Rs2,975 to Rs3,000, 1,200 bales, each Sanghar and Jhole at Rs2,950.
PUNJAB TYPE: 1,200 bales, Burewala a Rs2,950 to Rs2,975, 1,000 bales, Fazilpur at Rs2,950 to Rs3,000, 1,000 bales, Multan, 400 bales, Mian Channu, 600 bales, Sahiwal, 400 bales, Jahania, 600 bales, Pakpattan at Rs2,950, 1,200 bales, Burewala at Rs2,950 to Rs2,975, 600 bales, Bahawalpur 400 bales, Rahimyar Khan and 1,000 bales, Khanewal at Rs2,950, 600 bales, Chichawatni at Rs2,925 to Rs2,950, and 400 bales, Vehari at Rs2,925 to Rs2,935.
