KARACHI, June 1: Cotton market on Wednesday passed through a dull session as spinners and mills did not make fresh offers apparently awaiting the TCP auction on Jun 4. In its weekly auctions, the TCP has so far sold about 0.4m bales mostly to local spinners followed by some foreign buyers at a competitive price depending on the quality of lint involved.

In its latest auction on June 4, it will offer 55,000 bales for both the local and foreign buyers in line with its reference price and indications are that it could find willing local buyers but foreign one may not match the local bid prices, brokers said.

But cotton analysts said the fall of New York cotton futures below the 50 cent barrier for the ruling July forward contract has changed the future price outlook and the TCP may not be in a position to get a fair price in the current auction of June 4.

The ruling New York forward July contract on Tuesday fell below the barrier of 50 cents per lb at 48.64 cents per lb off 1.79 cents, while the new crop October was marked down by 0.88 cents at 51.10 cents per lb on speculative trade amid reports of falling demand from the world consumers.

“Owing to steep decline in the New York cotton futures, TCP may not be in a position to dispose of all the unsold stock of one million plus by the official deadline of August 14,” analysts said.

Price could be the chief factor for the TCP’s inability to meet the government demand as it could not sell lint below its parity level after adding overheads to the procurement price of Rs2,159 per 40 kg.

The June 4 TCP auction will give a fair idea of the future price outlook and whether or not TCP is willing to sell at a loss but an air of optimism prevailing in the textile sector amid hopes that lint prices may drop in line with international prices during the coming sessions.

However, there was no change in the official spot rates, although some of the deals reported in the ready section were done slightly above them for premium lots. About 1,500 bales, mostly in retail lots changed hands depending on the quality premiums, the lowest and the highest rates being Rs2,050 and 2,250 per maund.