KARACHI, June 12: Trading in new crop from the lower Sindh resumed on Thursday as a leading cotton broker reported a maiden deal for delivery after about a month.
A ginners from the lower Sindh ginnery has made a forward deal of 200 bales at Rs2,350 for delivery between July 15 and 18 and brokers expect some more deals during the next couple of sessions from other ginners as picking operations in these areas are getting impetus owing to a warm weather.
In the lower Sindh cotton belt cotton crop is sown in February or early March owing to climatic conditions and picking operations generally are resumed in June and ginning factories start operations after sufficient phutti arrives in their ginneries.
However, spinner perceptions that the new crop prices may be lower around Rs2,100 or slightly above seem to have no relevance to the objective conditions relating to supply and demand factor. The opening of the new crop on the higher side worried spinners as they were awaiting the arrival of the new crop amid hopes that an increase of Rs50 per 40 kg in the official support prices of phutti may stabilize rates of the old crop below Rs2,500 per maund.
But maiden deal at Rs2,350 has encouraged those ginners who still hold an unsold stock of 0.160m bales not to lower their asking prices, brokers said.
That was perhaps why some of the deals, struck after several blank sessions, were finalized around the ginners asking price of Rs2,500 per maund. Even old crops stray lots from the central Sindh cotton belt were also sold at the higher price of Rs2,350 per maund.
Floor brokers said spinners and mills may be a bit worried over the developing situation on the cotton front as yarn prices on the world markets are still on the lower side of their average export parity levels.
“It could well mean that the new lint crop may remain expensive and we have to operate under the new price mechanism because of a supply gap,” one spinner said.
But some others hope a modest decline in prices after new crop supplies get normal possibly by the end of August or early September when ginning operations are resumed in the central Punjab cotton belt.
There was no change in the official spot rates, which were quoted at the overnight level despite higher ready rates at which some deals were transacted.
After several lean sessions, about 4,000 bales changed hands as spinners resumed their buying operations in the backdrop of fiscal incentive to the textile sector in the new budget.
The following are some of the deals, which gone through late on Thursday evening:
NEW CROP: 200 bales, Sultanabad at Rs2,350, delivery by the middle of the next month and 200 bales, current crop from Shahpur Chakkar also at Rs2,350.
CURRENT PUNJAB CROP: 700 bales, Khanpur at Rs2,525, 600 bales, Lodhran at 2,525 and 1,500 bales, Shujabad at Rs2,450.