KARACHI, March 9: Brisk activity was witnessed on the cotton market on Saturday as spinners and textile mills indulged in near panic-buying to grab the floating stock of quality lint.
For the first time during the last about two months, spinners chose to re-enter the market before it was too late and the stocks of quality lint are fully exhausted and tried to play the role of trend-setters, dealers said.
Both quality and seedstuff lots were sold above Rs.1,700 per maund as brokers predicted an imminent price flare-up if the current pace of panic mill buying was sustained.
“Many may not agree price war between the spinners and the TCP has already begun,” claims a leading broker. “But it may well prove a no-win situation for the both in the backdrop of prevailing recession on the world textile market and falling prices.”
However, till late in the evening spinners were not inclined to take even technical breather and lifted all the lots offered for sale irrespective of the asking prices, he added.
As a result, big lot business was the hallmark of the day’s proceedings, which also included an unfixed deal for 6,000 bales from a central Sindh ginnery.
Unfixed deals mean that the buyer will pay the price to the seller at the prevailing market rates on the day of delivery or when he lifts the consignment from the seller’s godown. The forward deals are the part of the cotton trade and in most cases are judiciously honoured by the contracting parties excepting when prices rose or fall sharply then there are some defaults.
In both the cases either the seller or the buyers backout but in most of the cases the price difference is paid to buyer in case prices show an abnormal rise.
Apart from leading spinner groups, smaller ones were also in the line fearing price flare-up and covered their nearby positions at the higher rates.
Official spot rates did not show any major change and remained firm in line with the ready transactions.
Ready offtake soared to 20,000 bales of both Sindh and Punjab types, but the major thrust was on the former for quality reasons. The following are some of the deals,which gone through late on Saturday evening:
SINDH VARIETY: 2,000 bales, Nawabshah at Rs.1,625, 2,200 bales at Rs1,700, 1,000 bales, Qazi Ahmed at Rs.1,625, 500 bales, seedstuff at Rs1,700, 1,000 bales, Sakrand at Rs.1,700, 6,000 bales, unfixed,1,400 bales, Oderolal at Rs1,700, 600 bales, Rasulabad at Rs1,600, 800 bales, Kumb at 1,600.00,400 bales, Khairpur at Rs.1,600 and 1,000 bales, K-68 upper Sindh at Rs.1,710.
PUNJAB TYPE: 600 bales, Hasilpur at Rs.1.700, 400 bales, Liaquatpur at 1,625.00, 1,000 bales, Rahimyar Khan at 1,700 and 200 bales at 1,725.