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KARACHI, Oct 27: The cotton market on Thursday showed a firm trend as mills continued to build up long positions at the current levels fearing further increase in prices.
As a result, physical business expanded to about 20,000 bales, mostly from Punjab ginneries, interesting feature being that bulk of the business was finalized below or around Rs2,400 per maund.
“The prevailing prices seem to be providing a needed leverage to both ginners and spinners, the latter having an edge on the export front, brokers said.
It is interesting to note that reports that the crop may be short by 2.5m bales below the official target did not generate panic among the spinners and mills that played safe and did not opt for panic buying, they said.
Together with carryover stocks and imports, the expected total crop of 12.5m bales is enough to feed the textile sector, without resorting to further imports, cotton analysts said. “This perception did not allow any panic among buyers.”
“The credit for the current price stability largely goes to growers who did not hold on to their stocks of phutti and maintained a continuous flow into ginneries, the selling price being between Rs1,025 and Rs1,100,” they said.
Meanwhile, reports coming from major growing areas indicate that the second picking in upper Sindh and southern Punjab cotton belts is well in progress and will give a fair idea of improvement or decline in the current crop estimates.
There was, therefore, no change in the official spot rates for the second session in a row, while on the other hand New York cotton futures ran into selling and fell by 0.47 and 0.29 cents per lb for both the ruling December and the forward March contracts at 54.76 and 56.90, respectively.
Ready offtake was large totalling 20,000 bales, the following being some of the notable deals:
SINDH TYPE: 400 bales, Khairpur at Rs2,375; 400 bales, Nawabshah at Rs2,335; 200 bales, Sakarand at Rs2,335; 600 bales, Jhole at Rs2,300; 400 bales, Shahpur Chakkar at Rs2,310, and 1,000 bales, Mirpurkhas at Rs2,250 to Rs2,285.
PUNJAB VARIETY: 1,000 bales each, Bahawalpur, Kabirwala, Rajanpur, Rahimyar Khan, Khanewal, Jalalpur, Ahmedpur East, and 2,000 bales Choti, at Rs2,400; 800 bales, Jahania, 400 bales, Uch Sharif, 200 bales, each Shujabad and Muridwala, 400 bales, Lodhran, and 200 bales Hasilpur also at Rs2,400; 400 bales, Mongi Bungalow, at Rs2,390; 200 bales, DG Khan at Rs2,375; 200 bales, Multan at Rs2,385; 400 bales, Mian Channu at Rs2,375 to Rs2,390; and 2,500 bales, Samundri at Rs2,390.
