KARACHI, July 13: Active trading was witnessed on the cotton market on Saturday as spinners resumed their normal covering purchases after having failed to clinch big deals from the recent TCP tender.

According to market sources, the TCP highups have accepted only those offers from the spinners, which were in line with their benchmark prices and rejected all others.

It is for the second time during the last couple of days that the mills and spinners failed to buy a substantial quantity of lint from the TCP in its recently floated two tenders because of price differentials, they added.

As a result, both are back in the market and lifted all the lots offered for sales at rates depending on the quality of lint in trade but mostly above Rs.1,900 per maund and some deals in K-68 Sawgin from an upper Sindh ginnery was finalized as higher as Rs2,025.

The interesting feature was that spinners holding surplus stocks beyond their annual consumption requirements and purchased at much lower rates earlier in the season also joined the rank of lint sellers.

“A deal of 1,000 bales between the two mills was also reported at Rs.1,905 per maund, which indicates others may follow suit as lint ensures more profit than adding value to it,” says a broker.

He says indications are that spinners and mills from now onward will prefer to buy from the open market as the TCP is not in a position to lower its selling price of Rs.2,000 per maund owing to its higher overheads.

Unlike the previous season when the TCP has built up a long position to support the market and has faced problems in the backdrop of falling world prices, the situation this time is quite the contrary. It has so far purchased only 0.257m bales, about a half of which it has already committed to foreign as well as local buyers.

Reports coming from the cotton belt indicate that the condition of the crop is good and the growth is being maintained at a steady pace. Also there are no reports of any major pest attack in any of the crop areas.

Meanwhile, private sector exporters have registered fresh export contracts for 425 bales with the EPB on July 11, the total foreign sales so far being 0.244m bales.

It was perhaps in this background that official spot rates were maintained at the last levels. But New York cotton futures suffered sharp fall of 1.32 and 1.45 cents per lb at 44.74 and 46.30 cents per lb for both the ruling October and the distant December settlements.

Ready offtake was active as till late in the evening about 10,000 bales changed hands as under:

SINDH VARIETY: 1,000 bales, MNH-93 mill-to-mill at Rs.1,900, 1,200 bales, Mandodaro at 2,025 and 4,000 bales, Panu Akil at 1,850.00.