KARACHI, Oct 10: Cotton prices on Friday fell by Rs300 per maund from the overnight all-time peak levels as spinners and mills withdrew to the sidelines and did not make fresh commitments.
“Sanity at least returned to cotton trading as spinners took a united stand to forestall speculative increase in prices,” brokers said adding “prices are expected to fall further during the next couple of sessions as there are no supporting factors on which the current price flare-up could feed on.”
However, the current week will go into the history of cotton trading as prices rose by Rs800 per maund within a couple of days and fell by Rs300 in a single session.
There were more than one sellers around Rs2,800 per maund but no willing buyer, sending shock waves among the hereto jubilant ginners.
The decline in prices was attributed to reports that some leading spinners, representing big groups met in Lahore on Friday and decided in unison to contain the current price flare-up after staying away.
Floor brokers said their decision has an immediate negative impact on the price line as ginners fearing further erosions lowered their asking prices but there were no matching buying offers.
“Though a bit late, price war between the spinners and the ginners has just begun and who will be the ultimate winner is pretty difficult to predict at this stage,” market sources said adding “unity among the spinners and the mills could well be the chief deciding factor as any defector among them could well mean upper hand of the ginners in the price war.”
However, one thing is clear that small growers have already got the best price of their phutti stocks, between Rs1,000 and Rs1,300 per 40 kg but progressive growers who held on to their stocks for still better prices may be at a loss, brokers said.
In line with the overnight run-up, official spot rates were revised upward by Rs150 per maund but later prices fell from the peak levels in physical trading.
New York cotton futures rose by 0.10 and 0.36 cents per lb at 68.75 and 69.80 cents per lb for both the ruling Oct and the forward Dec settlements respectively.
Ready business was light in the absence of spinners as till late in the evening 600 bales, 200 bales each Gijra, Jhung and D.G. Khan changed hands at Rs2,800 per maund.