KARACHI, Aug 15: The cotton market on Monday resumed trading on a bearish note as lower Sindh ginners remained hasty sellers at the current levels, apparently fearing further decline in prices after arrivals of phutti further pick up.
As a result, official spot rates were quoted lower as compared to those at which physical trading is being done, indicating ginner perceptions about the size of the crop and its likely impact on new crop prices, brokers said.
While the official spot rates were lowered by Rs25 per maund for the third consecutive sessions at Rs2,225 in physical trading, most of deals in the new crop were finalized between Rs2,250 and Rs2,270, depending on the quality of lint in trade, they said.
Owing to a persistent decline in lint prices, cotton yarn rates on the wholesale market are also declining in sympathy, although end-product users are selective buyers amid predictions of further fall in prices.
“There is a feeling among the ginners that current rates could well prove best in the backdrop of higher crop ideas and larger buying by mills from the TCP,” some others said.
The general ginner perception is that spinners may not be as aggressive buyers for the new crop as they have been some weeks back and enter the market at will and would dictate their buying rates, they said.
As a result, most of the ginners from the lower Sindh cotton belt are trying to sell ready stocks on spot basis rather than holding them for a better price, they added.
Floor brokers said hasty selling by them was keeping the official rate committee at their toes all the time and they are revising downward daily spot rates in line with quality premiums.
However, they hoped that prices would stabilize around competitive levels during the next couple of weeks when the lint from the central Punjab cotton belt makes it debut.
Ready offtake was modest totalling about 2,000 bales from the lower Sindh ginneries, the following being some of the notable deals: 200 bales, Mirpurkhas at Rs2.250; 200 bales, Sanghar at Rs2,260; 200 bales, Sanghar at Rs2,265; and 200 bales, Shahdadpur at Rs2,270.