KARACHI, Dec 18: Cotton market on Thursday resisted fresh decline as ginners did not indulge in fresh selling and held on to their positions amid predictions of pressure on ready supplies in the coming weeks.
Spinners and mills too were selective buyers apparently awaiting fresh fall in prices but ginners were not in a obliging mood and as a result status quo was maintained, brokers said.
The recovery in New York cotton futures may be one of the reasons behind the status quo and ginners preference to hold on to their unsold positions rather than opting for fresh selling at the lower rates.
They said the decline in prices over the last two sessions was mainly caused by lower New York cotton futures and partly to near-panic selling by some of the weaker links among ginners who were out to clear the positions before the year is out.
“The perception that ginners will opt for hasty selling to adjust their bank overdraft limits before the year is out is fading out as leading ginners who still hold an unsold stock of 1.2m bales have vowed to stay on it”, they said.
Leading ginners are not inclined to entertain bearish idea at this stage as most of them know that the crop is short and their capacity to hold on unsold stocks the next year will prove a deciding factor as far as the price line is concerned.
Thus the new year trading may well witness a battle of wits between the ginners and spinners despite the fact that by that time a substantial quantity of foreign stuff may have found their way into the gowdowns of spinners and mills.
That was perhaps widely speculated fresh fall in prices was forestalled at least for the near-term as year-end closing by both the spinners and ginners will eventually lead to a low daily offtake.
The official spot rates were, therefore, firmly held at the last close, although most of the deals in fine lots were done well above them.
New York cotton futures on the other hand recovered from the recent lower level as both the ruling March and the distant May contracts were quoted higher by 0.45 and 0.20 cents at 70.37 and 71.30 cents per lb respectively.
Ready business was active totalling about 30,000 bales, the following being some of the notable deals went through on Wednesday evening:
SINDH VARIETY: 6,000 bales, Khairpur at Rs3,000 to Rs3,025, 4,000 bales, upper Sindh at Rs3,150 to Rs3,175, 600 bales, Sanghar at Rs2,800.
PUNJAB TYPE: 2,000 bales, Lodharan at Rs3,200, 1,500 bales, each Rajanpur and Fazalpur at Rs3,150, 1,000 bales, D.G.Khan, 3,000 bales, Rajanpur 1,000 bales, Sadiqabad and 1,600 bales, Ahemdpur East at Rs3,100, 1,800 bales, Hasilpur at Rs3,000 to Rs3,100 and 1,000 bales, Rahimyar Khan at Rs3,100 to Rs3,150.