KARACHI, June 23: Physical trading on the cotton market on Friday shrank to modest proportions as spinners and mills kept to the sidelines followed by reports of steep decline in New York cotton futures on speculative selling, which analysts said may have imports of lint a bit competitive.
They said owing to higher local prices and tough competitions at the TCP tenders, spinners are in search of alternate sources of supplies at the lower levels. The current fall in New York cotton futures have raised hopes of further fall in line with the spinner perceptions.
According to spinners they need another half a million bales to supplement their stock position before the arrivals of the new crop both from the lower Sindh and the central Punjab cotton belts during the next couple of weeks but fears of supply gaps in between worries them.
“The mill intake during the current season could touch the high mark of 15m bales owing to steady rise in export of both value-added textiles and cotton yarn,” market sources said. Adding “spinners are taking an extra care about their stock positions to meet their shipments obligations.”
Ginners hold in part some of the stocks they needed but their asking prices are on the higher side of our export parity levels, spinners said and that is perhaps why “we are playing hide and seek game with the ginners in daily trading.”
But floor brokers said the market trend is expected to be set by the June 26, TCP auction as ginners may revise their asking prices in line with those at which the TCP accepted the bids both from the local and foreign buyers.
Meanwhile, reports reaching here from the entire cotton belt indicate that there is no incident of pest attack on the tender plants owing perhaps to warm weather, and are steadily growing .
Official spot rates were, therefore, steadily held at the last levels, although some of the deals in the ready section were done above them depending on the quality of lint.
New York cotton futures on the other hand were marked down by 1.77 and 1.82 cents per lb at 49.12 and 52.91 cents both for the matured July and the new crop October settlements, respectively.
Ready off take was light totalling 1,500 bales from the southern Punjab cotton belt sold around Rs2,600 or slightly below themfor inferior type.