KARACHI, Aug 13: Cotton prices on Monday nosedived as ginners indulged in hasty selling following reports of pick up in phutti arrivals and Aptma’s threat to close down their mills owing to higher lint prices.
As a result prices fell by Rs100 to Rs150 per maund for both the Sindh and the Punjab varieties as some of the deals were reported as lower as Rs3,225 and Rs3,300 per maund from the weekend peak level of Rs3,400 for both Sindh and the Punjab lint, said a leading broker Naseem Usman.
He said phutti prices also suffered an identical fall as some of the growers sold their newly-picked phutti at Rs1,500 to Rs1,550 per 40 kg, lower from the previous Rs1,700 or slightly below.
He said spinners’ threatened to close down their mills if the government did not allow an emergency basis import of lint from India through Wagha as it may not be possible for them to keep the wheels moving.
Although there was no official word, ginners and growers seem to have read too much in the threat and immediately lowered their asking prices, some others said.
Growers also revised downward their selling prices and in some of the areas in the central Punjab they flooded ginneries with phutti apparently fearing further fall in prices, they added.
But spinners and mills kept to the sidelines most of the time in an apparent effort to further unnerve the growers to lower their prices to the pre-flare level of Rs1,350 and Rs1,400 per 40 kg.
“The war of wits between the grower and the mills has just started after the former has assumed the role of price trend-setter in the backdrop of lower crop projections,” said a cotton analyst.
Spinners will await the resumption of operations by the upper Sindh and southern Punjab ginners and the arrival of foreign lint before going all-out for a “big kill on the local front”.
Official spot rates were quoted unchanged at the previous level of Rs3,150 per maund but in the ready section most of the deals were done well above them.
The following deals were changed hands on Monday evening: 200 bales, Sultanabad at Rs3,225 and Rs3,250, 200 bales, Sanghar at Rs3,300 and 1,000 bales, various Punjab stations at Rs3,300 to Rs3,325 per maund.
The following are Monday’s new crop Karachi Cotton Association (KCA) official spot rates for local dealings in Pak rupees for base grade 3 staple length 1-1/32” micronair value between 3.8 to 4.9 NCL.
Rate for Ex-Gin Price Up-country Spot rate
Expenses Ex-Karachi
37.324 kgs 3,150 50 3,200.00
Equivalent
40 kgs 3,376 50 3,426.00