KARACHI, Sept 15: Cotton prices on Monday resumed their upward drive followed by near-panic mill buying amid reports of lower crop in China owing to floods and heavy rain.
The reports of Chinese short crop came at the heels of reports of a pest attack in some of the cotton growing areas, which pushed lint prices from the last week’s lows of Rs2,250 to Rs2,550 per maund, without 15 per cent sales tax, sending shock among the spinners.
Most of the deals in the ready section were finalized Rs25 to Rs50 per maund higher at Rs2,525 to Rs2,550 after spinners and mills indulged in big-lot business in an effort to grab the floating stocks, dealers said.
While the lint from the central Punjab stayed weak as compared to its Sindh counterpart owing perhaps to quality reasons, which remained in strong demand causing an identical increase in phutti rates, they said.
The interesting feature is that ginners are not holding back stocks to sell them at the higher rates fearing a sudden change in the future price outlook and are keen to liquidate their positions at the prevailing rates, they said.
Market sources said the local prices are following the trend on the New York Cotton Exchange where both the futures contract have soared to new peak level of 66 cents per lb on heavy speculative support followed by reports of a short crop in China.
“I don’t think prices could ease from the current higher levels in the backdrop of pest attack in some of the areas of the entire cotton belt,” a cotton analyst said adding “the crop deficit in China, one of the major world cotton producers, could significantly add to the prevailing bullish tendency in the global prices.”
Spinners and mills were, however, in no mood to sit on the sidelines and purchased all the lots offered by the ginners for sales irrespective of the price tag, he said.
The panic mill buying reflects that they have a fair idea of the local crop and the world price situation at least for the short-term. But all knew that the imports of lint may be expensive.
It was in this background that official spot rates were marked further higher by Rs25, although in the ready section most of the deals were done well above them.
Ready offtake was large as till late in the evening about 8,000 bales changed hands, the following being some of the notable deals:
SINDH TYPE: 1,600 bales, Shahdadpur at Rs2,525 to Rs2,550, 1,000 bales, Tando Adam at Rs2,525 to Rs2,550, 400 bales, Sinjoro at Rs2,525 and 200 bales at Rs2,500, 400 bales, Mirpurkhas at Rs2,425, 200 bales, Tando Adam at Rs2,425, 600 bales, Nawabshah at Rs2,525 and 1,000 bales Khipro at Rs2,525.
PUNJAB VARIETY: 200 bales, Chichawatni at Rs2,500, 200 bales, Burewla at Rs2,500, 200 bales, Sahiwal at Rs2,475 and 200 bales Mongi Bunglow at Rs2,500.