KARACHI, Oct 3: Trading activity on the cotton market on Wednesday was maintained on the higher side as spinners and mills were not inclined to miss an attractive bait of competitive prices.
Analysts said prices are expected to fall further from the current levels on renewed selling by ginners owing to about 60 per cent increase in the arrivals of phutti during the fortnight ended Oct 1, 2007, which soared to 1.816m bales as compared to last season’s comparable figure of 1.103m bales, showing an increase of 0.713m bales.
But later in the evening prices eased by Rs25 per maund on selling triggered by reports of higher arrivals of phutti into the Sindh ginneries, which also doubled to a million bales as compared to 0.450m bales at the same time last season.
Big-lot business was again the hallmark of the session as financially sound parties and having secured export outlets continued to build up long positions at the current levels, floor brokers said.
They said instances of quality war are not lacking but contenders are keeping a low key in an apparent effort not to work against their weaker links.
“The chief task before us to cover our forward sale positions as well as to keep prices within our export parity levels,” said a leading spinner adding: “So far so is good but future price outlook will be finally set by the size of the crop.”
According to conservative estimates, spinners during the current season will need 15m bales plus and there could be worries on the supply front toward the fag-end of the cotton season.
“But the steep decline in New York cotton futures for the last couple of sessions seems to have changed the world price outlook”, another spinner said. A fresh fall below the 60-cent per lb level is expected to make imports of lint viable, he added.
Although it appears to be a distant hope as world consumption of lint has far exceeded the actual supplies despite higher crop in India and some other producing countries, he added.
New York cotton futures fell further by 1.75 and 1.87 cents per lb at 60.30 and 63.24 for both the ruling October and the distant December contracts, respectively, amid strong two-way speculative activity.
A further decline in these prices will certainly have negative impact elsewhere, including Pakistan, they said.
Official spot rates were, however, did not show any change and were quoted at the previous level of Rs2,875 per maund.
The following are some of the notable deals, which were gone through on Wednesday:
SINDH TYPE: 1,200 bales, Shahdadpur at Rs2,900 to 2,925, 1,000 bales each, Mirpurkhas and Sanghar at Rs2,875 to 2,900, 1,000 bales, Khairpur at Rs2,900 to 2,925, 400 and 600 bales, Pithoro and Tando Adam at Rs2,925.
PUNJAB VARIETY: 1,000 bales, Burewala at Rs2,885 to 2,910, 600 bales, each Pir Mahal, Bahawalpur and 400 bales, Gojra at Rs2,900, 400 bales, Khanewal at Rs2,925, 600 bales, Chichawatni at Rs2,875, 800 bales, Sahiwal at Rs2,890 to 2,900, 400 bales, Pakpattan at Rs2,890 and 60 bales, Muridwala at Rs2,850.
