KARACHI, Nov 19: Cotton prices on Wednesday eased from the recent higher levels on active selling by the ginners followed by larger arrival of phutti into the ginneries for the third consecutive month, allying fears of a short crop.
Prices of fine types were lowered by Rs50 per maund but some of the medium staple length lint in the central Sindh cotton belt was traded as lower as 2,700 per maund, signaling fresh pruning may be on the cards, floor brokers said.
In physical trading, fine lots from the southern Punjab cotton belt were traded lower by Rs100 per maund, having negative impact on phutti prices, they said.
“What worries us most is the larger than normal unsold stocks lying in their godowns, said a leading ginner, adding “if the resumption of operations by the TCP is further delayed, prices can ease further.”
He said about Rs30 billion are tied to the unsold stocks and the consequent liquidity crunch is delaying payments to growers as well as limiting our buying capacity.
Spinners said the conditions on the export front are not that ideal as falling prices of textiles owing to recession in the importing countries had cut our profit margins.
Moreover, finished stocks of textiles are piling in our godowns owing to lack of active demand, having an adverse impact on our liquidity, they said.
They said the textile industry being one of major foreign exchange earners for the country is worst hit by the prevailing financial crisis in advanced countries, both in terms of quantum and export proceeds.
New York cotton futures on the other hand resisted fresh fall and ended with fractional gains of 0.02 and 0.22 cents per lb at 39.39 and 41.84 cents for both the maturing December and the ruling March settlement, respectively.
The following are some of the notable deals reported by the brokers in the ready section.
SINDH TYPE: 1,000 bales, Mirpurkhas and Sultanabad at Rs2,700 to 2,750, 400 bales, Hyderabad at 2,900, 600 bales, Shahdadpur at 2,800 and 400 bales, Sanghar at 2,850, 800 bales, Rohri at 2,950 to 3,000, 600 bales and 400, Khairpur and Hala at 2,750.
PUNJAB VARIETY: 1,000 bales, Khanewal at Rs3,045 to 3,050, 1,000 bales, Burewala at 3,000 to 3,075, 1,000 bales, Chani Goth at 3,050, 2,600 bales, DG Khan at 3,025, 1,000 bales, each Shadan Lund and Shah Jamal, 1,400 bales, Rajanpur, at Rs3,000, 800 bales, Mian Channu at 2,950 to 3,075, 800 bales, Liaquatpur at 3,050, 400 bales, each Yazman, 600 bales, Ahmedpur East and Bahawalpur, 400 bales each Faqir Wali, Kabirwala and Rahimyar Khan at 3,000, and 1,200 bales, Bahawalnagar at 2,975.