KARACHI, Nov 12: The cotton market on Saturday consolidated the overnight gains as spinners and mills made fresh commitments amid prevailing panic about the future supplies.
Brisk trading was again witnessed in the ready section where another 20,000 bales, including some big lots changed hands. Although panic among the spinners continued for the second session in a row, leading among them managed to get sufficient lots at an average price of Rs2,450.
“I don’t think an imminent price flare-up could be contained at this stage,” a leading cotton consultant says, adding: “The price situation is progressively slipping out of the control of market trend-setters.”
The next trading week could be very crucial for the future direction of the market, he said, adding that arrival figures for the fortnight ending Nov 15 will give a fair idea of the crop size and its impact on the price line.
“Alarm bell has already started ringing in the textile circles but a little restraint on their part could keep prices around their export parity levels and if they resorted to panic buying there could be a price flare-up,” market sources said.
After several lean sessions, the rebound staged by New York cotton futures on speculative support may again push prices to pre-reaction levels and that would make import more expensive, they said.
In physical trading, fine varieties were quoted further higher by Rs25 per maund under the lead of upper Sindh and southern Punjab lint, which is known for medium-long staple length, brokers said.
Central Sindh lint came in for stray demand and was sold at Rs2,325 on the lower side and Rs2,425 on the higher side.
Bulk of the support remained confined to the Punjab type where some big-lot deals were finalized by leading spinner groups who are not inclined to take risks on the supply front as they have to honour their export commitments.
It was perhaps in this background that official spot rates were firmly held at the last level of Rs2,385 per maund, but on the other hand New York cotton futures recovered 0.52 and 0.72 cents at 50.72 and 54.27 cents per lb for both the ruling December and the forward March contracts, respectively.
Ready offtake was fairly active owing to a strong mill buying at rising prices, the following being some of the notable deals:
SINDH VARIETY: 2,000 bales, Khairpur at Rs2,400 to Rs2,425; 1,000 bales, upper Sindh at Rs2,450; 1,000 bales, Nawabshah at Rs2,400; 200 bales, Shahdadpur at Rs2,350; 400 bales, Tando Adam at Rs2,325; 400 bales, Bucheri at Rs2,400; and 400 bales, Dadu at Rs2,425.
PUNJAB TYPE: 4,000 bales, Rahimyar Khan at Rs2,425 to Rs2,450; 1,000 bales each, Rajanpur, DG Khan, Bahawalpur and Sadiqabad at Rs2,425 to Rs2,450; 800 bales, Bahawalnagar at Rs2,425; and 1,000 bales, each Khanpur, Multan and Khanewal at Rs2,450.