KARACHI, Jan 30: Cotton prices on Wednesday eased further as ginners remained active sellers but there was no matching demand from the mills or spinners.
Floor brokers said leading spinners, who have made forward sales of cotton yarn for the quarter ending March 31, are buyers for fine lots between Rs.1,550 and 1,650 to cover export commitments against higher counts of yarn.
“Bank demands on us are very pressing, which have forced us to offer lint even below breakeven points,” most ginners complain. “Higher unsold inventories owing to falling mill demand has further accentuated the situation.”
Weaker among us are honouring bank demand after selling lint at much lower rates, ranging from Rs.1,200 to 1,400 per maund, but spinners appears to be in no obliging mood.
An alarming situation is developing in the textile sector as both ginners and the spinners are at the receiving end. The former is the victim of lower demand after having purchased phutti at much higher rates and the latter could not pull itself out from the world recession.
“Spinners are still far behind their annual consumption targets and could revert to the market after international cotton situation gets normal,” ginners say. “What worries is the high incidence of unsold stocks and payments obligations to the growers and the bankers.”
The arrival figures for the fortnight ending Jan 31, may further aggravate the situation as higher unsold stock lying in the ginneries around 2.2m bales could push prices further lower.
Spinners need about 2.5 to 3m bales to see the current cotton year ending Aug 31, but their buying will essentially depend on the revival of world demand for textiles, dealers said.
The TCP is in the market and offering higher prices than the spinners but the size of their operations is claimed to be too small to bail out the ginners from the current uneven market conditions, they added.
It was perhaps in this background that official spot rates were lowered by Rs.25 per maund to Rs.1,600 but in the ready section deals were finalized on quality basis.
Ready offtake was light as till late in the evening about 4,000 bales changed hands as under: 800 bales, Bahawalpur at ZRs. 1,575.00 and 2,600 bales, Yazman at Rs. 1,600 to 1,650.00.