KARACHI, Nov 17: Cotton prices on Thursday eased further on active selling by ginners followed by the market talk of higher-than-expected arrivals of phutti into ginneries.
In physical trading bulk of the business was finalized at an average of rate of Rs2,425, the basis being the Punjab variety known for fine type, while Sindh type was quoted further lower.
Although official arrival figures for the fortnight ending Nov 15 have not been released so far by the Pakistan Cotton Ginners Association, an accelerated pace of phutti arrivals worried the ginners who tried to clear the backlog fearing further fall in prices, brokers said.
The continued weakness of the New York cotton futures, which has made imports cheaper, appears to be another destabilizing factor, despite the fact that the spinners may not opt for imports at least for the near-term, they added.
“The growers’ perception of higher prices in the backdrop of a short crop seems to be an illusion,” market sources said. “The price line is getting out of their hands for no apparent bearish reasons.”
The local cotton trade is heading for major crisis and the grower who was in a commanding position a couple of weeks earlier is now at the receiving end as he is flooding ginneries with the third picking of phutti.
Floor brokers said the TCP might not enter the market to stabilize prices at this stage as the fall in prices is the outcome of the counter market forces rather than any speculative manoeuvring on the part of any of the market players.
But it could sell its remaining unsold stock of last year’s lint to the local mills after inviting bids from the prospective buyers. According to market sources, the TCP still held an unsold stock of half-a-million bales from the previous stock out of its total purchases of 1.6m bales.
Official spot rates were further marked down by Rs25 at Rs2,375 per maund and so
did New York cotton futures which suffered a fresh setback of 0.55 and 0.41 cents at 50.41 and 53.60 cents per lb for both the ruling December and the distant March contracts, respectively.
Ready offtake was active totalling about 20,000 bales as under:
SINDH TYPE: 400 bales each, Shahdadpur and Sanghar at Rs2,350 and Rs2,275, respectively.
PUNJAB VARIETY: 2,000 bales, Bahawalpur, 1,000 bales, each Rajanpur, Ahmedpur East, Jalalpur, 1,000 bales, Gojram, 400 bales, Basti Maluk, 200 bales, Jahania, 400 bales, each Chistian, Muridwala, and Mamon Kanjan at Rs2,425; 1,200 bales, Yazman at Rs2,420 to Rs2,425; 2,000 bales, Lodhran at Rs2,425 to Rs2,430; and 400 bales, Kehror Pacca at Rs2,400.