KARACHI, May 4: Trading on the cotton market on Wednesday remained dull as both buyers and sellers kept to the sidelines awaiting fresh developments on the New York futures market. Ginners have welcomed the increase in the next year’s production target to 15m bales after having already harvested a crop of 14.347m bales during the current season. The increase appears to be not that ambitious as the introduction of new varieties has changed the per acre yield outlook, they said.

The steep decline in the New York cotton futures should have worried local ginners in normal seasonal norms but as most of them had already liquidated their long positions, it may not have any negative impact on the local prices, brokers said.

But the TCP tender for another 60,000 bales may be affected as limit-fall in them may allow prospective bidders to lower their bid prices in the line with the world rates, they said.

Indications are that TCP auction of May 7 may not be that smooth as its maiden one was as any further fall in New York cotton future could lower bid prices, notably from the foreign bidders, market sources fear.

In its last auction, TCP had managed to get a higher price of 48.35 cents per lb and any bid below it could well mean losses on sales followed by rejection of many bids, notably for fine lots, they said.

The reversal in the New York cotton futures came at a time when the TCP was poised for another auction for a big quantity of 60,000 bales.

Because of quality factors including staple length, Pakistan lint on the international markets is sold at a discount of five cents per lb as compared to long staple US and Egyptian varieties, cotton specialists said.

New York cotton futures on Tuesday were marked down by limit-fall of 2.30 and 2.51 cents per lb for both the maturing May and the distant July settlements at 55.50 and 54.07 cents respectively.

Local official spot rates on the other hand did not show any change and were firmly held at the last level of Rs2,200 per maund. Ready business was modest totalling about 1,500 bales, as under: 650 bales, Mirpurkhas at Rs2,100 and 700 bales, Rahimyar Khan at Rs2,225.