KARACHI, Oct 5: Cotton market on Friday remained under pressure as prices showed fresh decline of Rs25 per maund as a section of ginners continued to liquidate long positions mostly at a loss.
About 20,000 bales changed hands mostly below Rs2,900 per maund, an average price being Rs2,850. But some of the deals in the central Sindh lint were done as low as Rs2,775, indicating that ginners have started to feel the pinch of higher phutti prices.
“There is no traditional balance in the prices of phutti and lint,” said a leading ginner. Commenting on market reports that a number of ginning factories have closed their operations both in Sindh and Punjab, he said, “yes about a dozen ginners have shut their business owing to higher production costs including expensive phutti”.
Based on the current rate of phutti at Rs1,425 to Rs1,475 per 40 kg, a competitive rate for lint should be around Rs3,000 per maund but we are obliged to sell lint between Rs2,850 to Rs2,900 per maund a net loss of Rs100 to Rs150 per maund, he said.
Spinners and mills too are not that happy in the prevailing conditions in the cotton trade, although they have some other problems including higher costs of inputs but the current rates of lint seem to be in line with their export parity levels, dealers said.
But a leading cotton analyst said there are no hard and fast rules to provide an even playing field to the players in the cotton trade. Some time ginners have an upper hand in fixing lint prices as they did early in the season and sold their product at Rs3,300 per maund.
And sometime spinners and mills hold the key to lint rates as they are currently engaged in mopping operations as prices are in line with their export parity levels, the analyst added.Official spot rates were firmly held at the overnight level of Rs2,850 per maund but in the ready section prices were based on the quality of lint.
The following were some of the notable deals which changed hands on Friday evening:
SINDH TYPE: 1,200 bales, Shahdadpur at Rs2,875 to Rs2,900, 1,500 bales, Nawabshah at Rs2,850 to Rs2,875, 600 bales, Sanghar at Rs2,850, 2,000 bales, Tando Adam at Rs2,775 to Rs2,850.
PUNJAB VARIETY: 1,000 bales, Khanewal at Rs2,925, 1,000 bales, Rahimyar Khan at Rs2,900 to Rs2,920, 1,000 bales, Burewala at Rs2,850, 600 bales, Arifwala at Rs2,875, 500 bales, Pakpattan at Rs2,865 and 1,000 bales, Vehari at Rs2,815 to Rs2,850.
