KARACHI, June 17: Trading on the cotton market remained cheerless as spinners were not inclined to make fresh commitments at the asking prices of ginners.
“Irrespective of the quality premium any prices above Rs2,350 per maund without 15 per cent sales tax is on the higher side of our export parity levels,” leading spinners claim. “Our parity comes around Rs2,350 on the higher side and below it is considered a competitive rate.”
Moreover, the Far Eastern yarn market being the victim of Sars-related virus for the last two months is yet to get normal and once the importers of Hong Kong start opening letters of credit the local market will heat up.
“The local buying by the end-product uses is pretty hectic but until the piling exportable surplus of yarn is not cleared the allied liquidity problems will continue to affect physical trading,” spinners said.
However, the worst period seems to have over the exports of textiles, including yarn, are heading toward a near-boom conditions possibly during the first quarter of the next fiscal, they said.
But ginners said local prices were in line with the prevailing world and after taking into account the discount of quality differential, the local lint is still cheaper.
“We don’t expect any softening in the current price line as supply and demand factors as well as world consumption figures will continue to guide the future lint prices,” they said.
After a modest correction, New York cotton futures recovered 0.63 and 0.28 cents per lb at 55.67 and 57.95 cents per lb for both the ruling July and the new crop October settlements, respectively.
The fact that the new crop contract is close to 60 cents per lb level, which if attained will be billed as 20-year high signals the next crop season could be a record one based on higher consumption perceptions, they added.
On the export front, private sector sold 3,915 bales to buyers from Indonesia, Bangladesh, Thailand and Taiwan, the total foreign sales so far being 0.190m bales, which also include 54,148 bales of the old crop.
Official spot rates did not show any change owing to slack business in the ready section and remained pegged at the overnight levels.
Ready offtake was 200 bales of the new crop from Sultanabad done at Rs2,350, delivery will be made between July 15 and 20.