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May 24, 2008
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Saturday
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Jamadi-ul-Awwal 18, 1429
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Trading gets slow on cotton market
By Our Staff Reporter
KARACHI, May 23: Trading on the cotton market was relatively slow on Friday owing to a weekly closure observed by the ginners in the Punjab cotton belt and the absence of selling offers by them.
Leading cotton analysts, however, said both ginners and spinners are in the process of having an overview of the 1.5 per cent hike in the discount rate to 12 per cent on the cotton trade in the backdrop of an increase in duty on L/Cs.
The impact of the hike on future price outlook would be known during the next couple of sessions as both the textile sector and ginners are in the process of evaluating how expensive it could be, they added.
However, local spinners and mills remained in the market and sought fresh supplies from ginners but price differentials did not allow much physical business, dealers said.
They said both spinners and ginners have taken rigid positions with regard to selling prices.
While the former are not inclined to go beyond their export parity levels, the latter are eyeing a uniform price level of Rs4,000 per maund for the balance of their unsold stocks.
But some of the recent deals indicate that a leading spinner group, having protected export outlets, has already purchased a good number of lots at this rate during the current week, they said.
Market sources said that the general perception about future price outlook is that it could be above the level of Rs4,000 per maund taking into consideration the current hike in prices of major inputs, notably fertiliser and pesticides.
Official spot rate was, therefore, firmly held at the last level of Rs3,500 maund but some of the deals were done well above them in the ready section.
New York cotton futures on the other hand remained under pressure and fell further by 0.99 and 1.36 cents at 69.99 and 75.21 cents for both the ruling July and the forward October settlements, respectively.
The following are some of the lots, which changed hands late on Friday: 1,000 bales, Gothki and 1,600 bales, Khanpur at Rs3,650.
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