KARACHI, Oct 23: Cotton market on Thursday resisted fresh decline in prices as ginners again raised their asking prices by about Rs100 per maund depending on the quality of lint in trade.
Most of the deals in the Punjab variety were done around Rs3,400 per maund as compared to overnight’s Rs3,275 and Rs3,300 after ginners opted for tactical price war to match the spinners “go slow” policy.
Fresh limit-gains in the New York cotton futures on speculative buying followed by reports of a global shortage of lint and China’s strong presence as a buyer on the world cotton markets appear to have reinforced ginner perceptions of a fresh price flare-up and they raised their prices again.
New York cotton futures, which generally regulate world prices were on Wednesday quoted higher by limit-gains at 77.59 and 79.72 cents, up 2.28 and 2.00 cents per lb for both the ruling December and the distant March settlements respectively.
The reports of difference of opinion among the top Aptma leaders and consequent reports of resignation by some of them, signalling a conflict about the current price war seem to have buoyed ginners who again raised their asking prices, brokers said.
“The spinner moves of restrain in buying to outwit ginners on the price front, appears to have lost relevance as the latter is again in the commanding position, making short crop a convenient scapegoat”, commenting on the cotton situation says a leading cotton broker.
He said the current price war will continue for the next couple of weeks as both will try to benefit from the current speculative squeeze on the cotton market.
Spinners again withdrew to the sidelines after ginners raised their asking prices and as a result, ready offtake remained at a low ebb as against hectic overnight off-take.
There was, however, no change in the official spot rate, although in physical trading prices were quoted higher.
Ready offtake was light as leading spinners and mills adhered to the sidelines anticipating decline in prices. As a result, about 7,000 bales changed hands, most from the Punjab ginneries.
The following are some of the deals finalized late on Wednesday evening:
SINDH VARIETY: 1,000 bales, Jhole at Rs3,200, 400 bales, Nawabshah at Rs3,300 and 1,000 bales, Sanghar at Rs3,100.
PUNJAB TYPE: 2,200 bales, Bahawalpur at Rs3,250 to Rs3,350, 1,200 bales Lodharn also at the same rate, 1,200 bales each, Hasilpur and Yazman at Rs3,300, 1,400 bales, Ahmedpur East at Rs3,300 to Rs3,325 and 800 bales, Sadiqabad at Rs3,400.