Trading remains slow on cotton market

Published December 3, 2004

KARACHI, Dec 2: Trading activity on the cotton market on Thursday further slowed down as ginners opted for the TCP rather than selling at the lower rates to the spinners and mills.

For the second session in a row, ready off-take remained light as leading ginners held on to their unsold positions, while their weaker link offered to sell their stocks to the TCP at much higher prices, dealers said.

As a result, fresh decline in prices was averted followed by reports that the TCP purchase orders have touched the high mark of 1.5m bales and its procurement staff remained aggressive buyer at the official rate of Rs2,159 per 40 kg for fine and contamination-free lint of export standard.

The TCP has also lowered its buying rates for the inferior varieties both from the Sindh and Punjab cotton belts amid reports that the private sector exporters are also in the run to cover their forward sales for the same quality, dealers said.

Some of the deals in the ready section were done at 1,600 to 1,800 and that of Punjab variety at Rs1,875 to Rs1,975 per maund respectively but physical business shrank to modest proportions in the absence of leading sellers, they said.

"The current status quo with regard to selling prices appears to be temporary as both the ginners and the spinners are awaiting the arrival figures of phutti into the ginneries for the fortnight ended Nov 30," brokers said. "The figure due tomorrow or a day after is expected to set the future price trend".

Prices could rise from the current lows if the figure is lower that the average two million bales, maintaining the inflated level for the last couple of weeks, but if it maintained the previous could be further decline irrespective of the strong presence of the TCP as a second buyer, they added.

The future price outlook is, therefore, evenly balanced depending on the size of arrivals, which would give a fair idea of the total crop, ginners said. It was in this background that official spot rates were held unchanged at the previous levels, depite decline of 0.77 and 0.89 cents per lb at 47.88 and 43.89 per lb in New York cotton futures for both the ruling December and the distant March settlements respectively.

Ready off take was modest totalling about 25,000 bales as under mostly in Punjab variety; 2,000 bales, Hasilpur at Rs.1,850 to 1,875.00,2,000 bales, each Sadiqabad and Rahimyar Khan at 1,875 to 1,900.00, 1,000 bales, Rajanpur at 1,900.00, 1,800 bales, Bahawalpur, 1,000 bales, Ahmedpur East, 1,200 bales, Lodharn and DuniyaPur 1,500 bales, Uch Sharif at 1,875.00, 1,600 bales of Yazman were also done at this rate and 1,000 bales, Kehror Pacca at 1,850.00.

The following are Thursday's new crop Karachi Cotton Association (KCA) official spot rates for local dealings in Pak rupees for base grade 3 staple length 1-1/32" micronair value between 3.8 to 4.9 NCL.
Rate for Exgin price Upcountry Expenses Spot rate ex-Karachi
37.324 kgs 1,825 50 1,875.00
Equivalent
40 kgs 1,956 50 2,006.00

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