KARACHI, March 20: Trading on the cotton market on Thursday remained insipid partly because of Friday closure on account of Eid-i-Milad and partly to fresh steep decline in the New York cotton futures.
Stray lots did change hands at the lower rates depending on the quality of lint in trade, but leading spinners and mills kept to the sidelines amid hopes that local prices could suffer sympathetic fall from the current higher level during the next week, floor brokers said.
After Wednesday’s brief lull, New York cotton futures resumed their downward drift on speculative selling followed by reports of fall in US exports and higher crop ideas, they said.
Indications are that both the ruling May and July contracts are heading to breach the barrier of 70-cents per lb, possibly by the next week and that could be an ideal rate to bridge the supply gaps here and there, cotton analysts said.
Although spinners had already covered their forward positions after the size of the local crop was known above 70 cents per lb but reports that some of the Indian exporters are demanding increase in prices against the firm L/Cs after the New York cotton futures soared to 90 cents plus per lb could prove a blessing in disguise to them.
“We will await further information whether or not the Indians are ready to honour their forward deals,” said a spinner adding: “In the absence of a positive reply we will opt for the US lint at much lower rates”. Spinners and mills awaited further developments on the world cotton front hoping further decline in prices and did not make fresh commitments for the local stuff for the last couple of sessions amid reports that the current downturn in world prices will continue next week also, market sources said.
New York cotton futures on Thursday were quoted further lower by three cents per lb for both the ruling May and forward July contracts at 72.02 and 74.23 cents, respectively.
There was, however, no change in the local official spot rates, which were held unchanged at Rs3,300 per maund.
Ready off-take was light totalling about 5,000 bales, the following being some of the notable deals: 1,000 bales, Sadiqabad at Rs3,480, 1,000 bales, D.G. Khan at Rs3,300 and 1,100 bales, Saleh Pat at Rs3,400.