KARACHI, Dec 8: Trading activity on the cotton market on Monday remained light as spinners kept to the sidelines most of the time apparently having look at their inventories before resuming their covering operations.
The interesting feature was that most of the deals were again finalized at the previous rates as fine lots again changed hands at a uniform rate of Rs3,300 per maund. Inferior lots were available Rs25 to Rs35 per maund lower as compared to peak rate.
Floor brokers said spinners and mills seemed to have absorbed the shock of a short crop as was reflected by consensus rate at which physical business was being done for the last about one week.
“Never before in the history of cotton trade such a remarkable status quo was ever maintained when the sellers and the buyers strictly adhered to their unwritten agreement,” he says.
Some others claim that as the prevailing rates suit both the sellers and the buyers, no one tries to outwit other on the price front despite fears of a substantial decline in production and higher annual consumption demand of the textile sector.
But market sources said the month of January could be very crucial for the industry as by that time the size of the total crop would be clear, adding “if ginners adhered to the current price perceptions next month also and are not lured by the possible speculation at that time, the industry will be saved from a major developing crisis.”
They said as a big gap was expected in the supply and demand early next year, the import figure could well prove a deciding factor as far as the ruling prices are concerned.
According to the market sources most of the leading spinners have already made forward deals for about 0.7m bales after New York cotton future dropped below the 70-cent per lb mark.
Some of the consignments had already reached their godowns, while others are on their way, but in any case they are not a negative market factor at least for the near-term as is reflected by stable prices.
Official spot rates were, therefore, again held unchanged at the weekend levels as ready rates at which deals were finalized also remained static.
Ready offtake was light as till late in the evening about 15,000 bales, changed hands as under:
SINDH TYPE: 600 bales, Sanghar at Rs2,850 to Rs2,950; and 1,000 bales, K-68 upper Sindh at Rs3,265 to Rs3,275.
PUNJAB VARIETY: 2,000 bales, Sadiqabad at Rs3,275 to Rs3,300; 200 bales, Bahawalnagar, 1,000 bales, each Haroonabad, Bahawalpur and Ahmedpur East at Rs3,300.