KARACHI, May 27: Quieter conditions prevailed on the cotton market on Friday as ready business remained sluggish in the absence of strong mill demand despite the fact that some of the ginners had lowered their asking prices. Spinners say we need fine lots at the closing stages of the fiscal year to spin fine counts of cotton yarn but some of the ginners are still holding stray lots amid hopes of further increase in prices.

As a result, we have to rely on supplies of better quality lint from the TCP, which unlike the previous seasons allowed local spinners and mills to bid for the lots offered for sales, they said. All eyes of the spinners and mills remained focused on TCP weekly auction being held on May 28, and they want to lift all the lots slightly above the reference price, some others said.

Unlike the previous seasons, the cotton trade has now entered a crucial phase despite a bumper crop of 14m bales plus, considered to be in line with the industry’s annual consumption needs, they said. They said unsold stocks of lint with the ginners have almost been exhausted and bulk of them is with the TCP and mills have been the chief buyers in the previous four auctions lifting over 0.2m bales.

Owing to unstable world cotton prices foreign buyers did not actively participated in the TCP auctions as rate differentials were making f.o.b. prices more expensive than those of elsewhere. That was perhaps only a couple of foreign buyers participated in the auctions but their bid prices were too lower as compared to international prices, market sources said.

Meanwhile, reports coming from the major cotton growing areas indicate that bulk of the new crop has been sown and growth of the new crop is fairly steady as sufficient water is available for them.

In the lower Sindh cotton belt where the crop is said to be on the flowering stage, no incident of pest attack was reported owing perhaps to extremely warm weather. Official spot rates were held unchanged despite falling mill demand. Stray inferior lots from the central Sindh changed hands slightly above the Rs2,000 level as some of the exporters covered their positions against forward sales.