KARACHI, July 21: Trading on the cotton market on Monday resumed on a higher note as reports of suspension of picking operations of phutti and its arrival into the ginneries owing to rain caused pressure on ready supplies.
As a result, ginners raised their asking prices for the new crop by Rs25 per maund, but some brokers claim some of the lower Sindh ginners holding modest unsold stocks are reluctant sellers even at the higher levels.
Although growers hold modest stocks of phutti, they too have raised their asking prices by Rs25 to Rs30 per 40 kg to Rs975 and Rs985 depending on the quality of phutti.
However, ginners are not accepting the wet lot of phutti and mostly making forward deals for delivery during a fair weather. Any moisture in the phutti damages its fibre content, market sources said.
The ginners presume cotton trade may not be normal at least for the next two weeks as the recent rain spell has caused a massive disruption both in picking and ginning operations, and that is perhaps why those among them who hold stray lots are not inclined to part with them at least for the near-term, brokers said.
Despite being in short supply, spinners are playing safe and are not inclined to follow the demands of the ginners as they have to remain competitive on the world markets, they said.
“We can wait until sanity returns to the cotton trade,” says a leading spinner, adding “but no one among us in a position to go beyond our export parity levels.”
The trading on the cotton market is, therefore, at a standstill as a few hundred lots changed hands daily.
Both the ginners and the spinners are locked in a price war but it appears to be a no-win situation as spinners are not inclined to enter the row and mostly prefer to keep to the sidelines .
Meanwhile, reports coming from the entire cotton belt indicate that the second spell of monsoon rain is generally welcomed by the growers as it will accelerate the growth of the still tender plantations in some of the areas.
On the export front, total exports up to June 30, amounted to 0.323m bales, including of the previous crop, bulk of which was shipped by the private sector exporters followed by the Trading Corporation of Pakistan.
Ready offtake till late in the evening was about 500 bales of new crop changed hands as under: 200 each, Pithoro and Mirpurkhas at Rs2,400 and 200 bales, Burewala based on Sindh phutti at Rs2,470.