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KARACHI, Oct 7: Cotton prices on Saturday suffered fresh fall of Rs35 per maund as ginners tried to clear the backlog of their unsold stocks for no apparent bearish reason.
But some cotton analysts said both ginners and growers were a bit jittery over the falling world prices of lint which had made imports more competitive.
The perception that the local crop may be around the revised target of 12.5m bales but is said to be far below the annual consumption of the textile industry which needs around 15m bales plus to see the year through, they added.
“Ginners are not inclined to take even a calculated risk as did the oil mills in speculative trading in cottonseed cakes and lost million of rupees in the forward business and disposed of their stocks at phutti-based rates,” they said.
The other destabilising factor appears to be a considerable decline in the phutti prices and growers’ intentions not to hold on to unsold positions until sanity returns to cotton trading.
Heavy mill buying indicates that both spinners and mills are out to grab the floating stock at falling prices amid fears that the price jolt appears to be more psychological rather than based on objective supply and demand factors, market sources said.
Already spinners have, according to official figures, imported over 0.101m bales of lint from various sources up to May 2006 to meet any possible crop shortage and LCs have been opened for more foreign supplies, they added.
Official spot rates were, therefore, again lowered by Rs35 at Rs2,425 in line with those at which physical business is being done.
New York cotton futures eased further 0.40 and 0.60 cents per lb at 48.10 and 49.09 cents for both the ruling October and the forward December contracts respectively.
Ready business was on the higher side as till late in the evening about 15,000 bales changed hands, the following being some of the notable deals.
SINDH VARIETY: 1,000 bales, Mirpurkhas at Rs2,425, 1,200 bales, Shahdadpur at Rs2,440 to Rs2,450, 1,000 bales, Tando Muhammad Khan at Rs2,425 to Rs2,430, 1,000 bales, Sanghar at Rs2,400 to Rs2,410, 800 bales and Khipro at Rs2,400 to Rs2,420.
PUNJAB TYPE: 3,400 bales, Burewala at Rs2,450, 400 bales, Bahawalpur, 200 bales, Rajanpur, 200 bales, Lodhran at Rs2,475, 600 bales, Arifwala at Rs2,440 to Rs2,450, 200 bales, Chichawatni, 400 bales, Mamon Kanjan, 200 bales, Haroonabad, 200 bales, Gojra, 200 bales, Mongi Bungalow, 1,000 bales, Bahawalnagar, 400 bales, Vehari, at Rs2,450, 200 bales Sadiqabad, 200 bales, Rahimyar Khan, 200 bales, D.G. Khan at Rs2,440 and 200 bales, Depalpur at Rs2,470.
