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KARACHI, Nov 24: Cotton prices on Monday stayed firm around the weekend levels but physical activity was relatively slow as a section of spinners adhered to the sideline because of delivery problems.
However, a number of deals were finalized during the last two days for post-eid holiday delivery around Rs3,250 to Rs3,300 per maund excluding 15 per cent sales tax.
Floor brokers said the major buying thrust of spinners was again confined to fine lots, which need to spin higher counts of cotton yarn for the export markets against their forward deals.
But a major shift was noted in the spinners’ buying preference as unlike the previous sessions they did not extend all out support to all the lots offered for sales by the ginners, they said adding “rather they were pretty selective and quality-conscious”.
They said their curtailed purchase orders are based on the perception that local prices could fall in line with the New York cotton futures, which are now facing massive liquidation from the speculators holding long positions.
Predictions are that New York cotton futures could fall further in the absence of China factor, which had been fuelling the current price flare-up.
Latest world crop estimate claim “China is harvesting a normal crop during the current season and reports of damage to crop earlier in the season were based on speculation.”
The current successive limit-fall on the New York Cotton Exchange are based on these reports. China is in the market but it buys on competitive rates to feed its expanding textile industry rather than making speculative buying to support the speculative tendencies.
As a result, leading ginners are keeping to the sidelines most of the time and lifting only those lots, which conform to their quality standards.
Official spot rates were, therefore, steadily held at the last levels although some of the deals were done above them.
Ready offtake was light owing to Eid holidays. The following business was reported during the last two days:
SINDH TYPE: 1,000 bales, Jhole at Rs3,000.
PUNJAB VARIETY: 4,500 bales, Khanpur at Rs3,300, 5,000 bales, Bahawalpur at Rs3,250 to Rs3,300, 400 bales, D.G.Khan at Rs3,250, 200 bales, Multan at Rs3,250, 2,000 bales, Yazman, 1,000 bales each Rahimyar Khan and Sadiqabad at Rs3,300. All these deals were finalized late on Saturday evening and on Sunday.
