KARACHI, Aug 31: Physical activity on the cotton market on Thursday gathered a fresh momentum as spinners and mills continued to make fresh commitments amid reports of a short crop.
Bulk of the buying remained confined to the central Punjab lint followed by reports of fine quality and staple length, which spinners need to spin higher counts of cotton yarn for fine cloth, brokers said.
An idea of panic-buying by mills may well be had from the fact that some of the deals in MNH-93 sawgin were finalised at Rs2,725 per maund, highest for current season so far.
But there was no buying pressure on the Sindh variety which rose slightly and mostly traded around Rs2,550 per maund, they said.
“The market appears to be heading to scale new highs if the current tempo of mill buying is sustained,” cotton analysts said, adding “the crop may be short but not to the speculated figure”.
Steep rise in prices at the beginning of season is not a healthy sign as far as exports are concerned, they said, adding textiles buyers may not be ready to pay more as the international lint prices are fairly stable around 52 cents per lb.
Most local brokers felt the current price flare-up appeared to be speculative as mills and spinners started a war of nerves among themselves on the price front and the chief beneficiaries were ginners and the growers.
Official spot rates were again held unchanged at the previous level of Rs2,550 but prices rose further in the ready section owing to strong mill demand.
New York cotton futures on the other hand fell further by 0.85 and 0.70 cents per lb at 52.50 and 54.67 cents for both the ruling October and the distant December contracts respectively.
Ready business was on the higher side as some of the spinners indulged in big-lot trading. As a result, about 6,000 bales, changed hands as under.
SINDH VARIETY: 200 bales, each Khipro and Hala at Rs2,525, 200 bales, Tando Adam at Rs2,550 and 200 bales, Hyderabad at Rs2,565.
PUNJAB TYPE: 200 bales, Samandri at Rs2,725, 1,000 bales, Bahawalnagar at Rs2,700, 200 bales, Bahawalpur at Rs2,710, 200 bales, Chichawatni at Rs2,710 and 100 bales, Sahiwal at Rs2,700.