KARACHI, Feb 1: Physical activity on the cotton market on Wednesday failed to pick up as spinners remained conspicuous by their absence apparently awaiting some positive developments on the export front.
Some fine lots both from the upper Sindh and the southern Punjab ginneries did change hands but inferior types were again neglected even though some of the ginners were inclined to further lower their asking prices, brokers said.
“The market seems to be heading towards a no-win situation as both the buyers and sellers have taken rigid positions on the price issue”, they said, adding “while ginners are in no haste to liquidate their long positions below their parity levels, spinners are seeking more supplies at the cheaper rates”.
As a result, some of the spinners holding short supply position did enter the market occasionally and lift stray lots mostly around Rs2,550 per maund, which appeared to be a consensus buying and selling rate.
Analysts said that ginners still held an unsold stock of about 2m bales, involving about Rs25 billion seemed to be in no haste to sell at lower prices as in normal conditions spinners try to get out of the long positions as the current one.
“The perception behind the strong holding capacity appears to be future price outlook based on supply and demand factors”, they said, adding “the general thinking is that prices could move further higher during the next couple of weeks”.
But spinners hoped that the ginners’ holding capacity could get a jolt after the release of the fortnight arrival figures during the next couple of sessions.
Official spot rates were, therefore, firmly held at the last close but stray business done in the ready section was finalized above them.
New York cotton futures on the other hand recovered from the recent low on active speculative buying and were quoted higher by 0.55 and 0.65 cents per lb at 55.72 and 57.14 cents for the ruling March and the distant May contracts respectively.
Ready off-take was light totalling about 5,000 bales as under: 1,000 bales each, Sadiqabad and Gothki at Rs2,550 and 1,000 bales, Ahmedpur East at Rs2,535 to Rs2,550.