KARACHI, May 9: After Wednesday’s interruption caused by the bomb blast, trading on the cotton market on Thursday resumed on an easy note as ginners continued to liquidate long positions fearing further decline in prices.
The mill buying at the falling prices was not shy as all the big-lots offered for sale were readily picked up. Most of the deals depending on quality were done below Rs1,500 per maund, while some fine lots, notably from the southern Punjab cotton belt managed to get a relatively better price.
Floor brokers said disappointed by the guarded support being extended by both the TCP and the private sector exporters, ginners appear to be in no mood to hold the fort and are in search of an exit route.
“There losses all-around but we now hate to add to them”, says a leading ginner referring to bank interest and other overheads being added to the unsold stocks.
Inventory losses are there but ginners seem to have decided to bail themselves out from the prevailing difficult position before the arrival of news crop from the lower Sindh cotton belt, he adds.
Great hopes are associated with the proposed meeting of the high-level Pakistan Cotton Ginners Association’s (PCGA) delegation with the federal Commerce Minister possibly by the next week sought by it to apprise him about the state of cotton trading.
“Stray lot buying by the TCP and the private sector exporters could hardly work”, leading ginners claim “a huge unsold stock of about a million bales needs some emergency steps”.
Why not the TCP, which has so far contracted to buy half a million bales go all out to achieve its target of a million bales as the central bank had already sanctioned a credit line of the same amount, they ask adding the go-slow is working against the underlying sentiment.
Meanwhile, reports coming from the central Sindh and the Punjab cotton belt indicate that growers have made all arrangements to resume sowing of the new crop in May and complete it by June 15, considered to be an ideal weather for a healthy crop.
Official spot rates remained pegged at the last levels but most of the deals finalized in the ready section were done below them depending on quality of the lint in trade.
New York cotton futures also showed modest recovery as both the maturing May and the ruling July contracts were quoted higher by 0.73 and 0.59 cents per lb at 32.20 and 33.70 cents per lb respectively.
Ready business was active as till late in the evening about 9,000 bales changed hands as under:
SINDH TYPE: 4,000 bales, Jam Sahib at Rs1,375, 2,400 bales, Nawabshah at Rs1,450, 1,000 bales, Gambt at Rs1,515 and 400 bales, Sanghar at Rs1,400.
PUNJAB VARIETY: 500 bales, Yazman at Rs1,675 and 1,000 bales, Sadiqabad at Rs1,450.