KARACHI, May 20: Cotton market on Tuesday showed quietly steady trend as ginners and spinners held on to their positions apparently awaiting fresh developments on the world textile front.
Spinners appear to be concerned over the falling demand in the Far Eastern markets, notably Hong Kong, one of the major cotton yarn importers from Pakistan and currently under the negative spell of Sars-related pressure on foreign trade.
Ginners on the other hand were a little worried as the falling unsold stocks did pose any problem for them as they could be disposed of just within a couple of days after the mills and spinners are back in the market, brokers said.
But chief worry of spinners is resumption of normal exports to the near and the far eastern selling outlets as they could relieve the current pressure on the piling unsold stock of cotton yarn and in turn will enhance their purchasing power.
“Big amounts of hard cash are tied to unsold yarn stocks and until normal exports resume, spinners purchasing power remained on the lower side”, market sources said adding “the current falling ready offtake is the outcome of liquidity problems being faced by the spinners and the mills”.
However, exports of cotton yarn and cloth and other value-added products to European Union and quota countries are claimed to be normal by the spinners, which has saved the textile sector from a major impending financial crisis, they said.
Reports coming from the southern Punjab cotton belt, where bulk of the unsold stock of lint are lying, indicate that the ginners have further raised their asking prices for the fine lots.
A deal of 1,000 bales at Rs2,600 shows that spinners are willing to pay more for quality lint meant to produce higher count of cotton yarn.
It was perhaps in this background that the official spot rates were firmly held at the overnight levels as some of the deals were done above them.
New York cotton futures on the other hand showed fractional either-way changes in the absence of strong speculative demand and higher crop ideas. The ruling July settlement was held unchanged at 54.20 cents per lb, while the new crop October contract was marked down by 0.5 cents at 56.90 cents per lb.
After several lean sessions stray lots changed hands in the ready section, the following being notable among them: 200 bales, Nawabshah at Rs2,500 and 1,000 bales, Khanpur at Rs2,600 per maund without 15 per cent sales tax.