KARACHI, Feb 1: Cotton prices on Friday remained stable at the previous levels as spinners and some of the leading textile groups again made active covering purchases against their forward sales.
About 10,000 bales, mostly fine and big lots changed hands as leading spinners resumed buying of quality lint against their forward sales of higher counts of cotton yarn.
Floor brokers said entry of the leading exporters into the market though was modest, it had brought spinners back in the arena, allowing prices to stabilize around the current levels. An export bought 500 bales from Tharo Shah at Rs1,600 indicating that world rates are improving.
However, fears of an increase in prices if the exporters extended their operations did not allow mills and spinners to sit on the sidelines and lift all the lots offered at the lower rates by them, they added.
According to market sources the foreign demand for lint is reviving, but the recession on the textile front continues, which has limited the buying options of the spinners.
They predicted that exporters could resume buying on a bigger scale by the end of the current month to meet their shipment deadlines meant for the month of February and their could a modest improvement in prices.
“But ginners are now not thinking of a price flare-up, their chief concern is how to get out of the prevailing impasse of larger unsold stocks and falling mill demand,” dealers said.
Their worry is genuine as heavy amounts are tied to the unsold stocks as the current daily modest offtake by both the spinners and exporters could not provide them the needed relief, they added.
The TCP is buying contamination-free lint cotton from some of the specified ginners, but the offtake is too small to influence the market to the parity level of ginners.
Meanwhile, reports coming from the foreign markets, notably the New York Exchange are not that encouraging as prices are moving there one or two cent range either-way, reflecting lack of foreign support. Both the contracts are hovering between 36 and 37 cents per lb for the last couple of weeks.
Reports coming from the southern Punjab and upper Sindh ginneries indicate that arrivals of phutti are gradually drying up as growers have dumped their stocks just in one go after prices started falling below the Rs700 per 40 kg level.
Official spot rates did not show much as owing to a near-consistency in physical trading at which actual deals were finalized.
Ready offtake was active totalling about 10,000 bales, mainly from the southern, the following being notable deals as reported by the Secretary of the Karachi Brokers Association, Naseem Usman.
SINDH VARIETY: 2,000 bales of Moro at Rs1,550, 1,000 bales, Bhiria at Rs1,550, 1,000 bales, Bhiria City at Rs1,550, 1,000 bales, Kot Deji at Rs1,550, and 500 bales of Tharo Shah at Rs1,600.
PUNJAB VARIETY: 1,200 bales of Sadiqabad at Rs1,600 to Rs1,700, 200 bales, Burewala at Rs1,200 and 1,000 bales of Bahawalpur at Rs1,600.