KARACHI, Jan 3: The upward drive on the cotton market was halted on Saturday as prices eased by Rs50 per maund from the recent highs on late selling by some leading ginners. However the underlying sentiment remained steady.
Cotton analyst Naseem Usman attributed the fall in prices to larger than expected arrivals of phutti at 9.7m bales for the fortnight ended Dec 31, 2008, higher by 0.630m bales, or seven per cent, from the previous year’s total for the same period.
Although mill buying soared to 7.4m bales, the unsold stocks of lint did not show much change as compared to previous figures and stood at 1.960m bales.
According to official details available from the Karachi Cotton Association (KCA), fine lots from the southern Punjab cotton belt were again traded between Rs3,300 to Rs3,400 per maund but the average rate fell to Rs3,200.
Floor brokers said although ready positions continued to be tight followed by reports of holding back of stocks by the leading ginners, but spinners were also not inclined to chase higher prices at least for the near-term.
They said the current pause caused by delivery problems owing to Muharram closures next week, but hoped the activity would be normal after the holidays.
“After having pushed prices well above the official spot rates, ginners appear to be in a pretty comfortable position on the perception that the future sailing could be normal in the absence of the TCP from the active market,” they added.
Official spot rates were revised downward by Rs50 at Rs3,250, but most of the deals in the ready section were done on quality basis.
New York cotton futures also eased modestly from the previous levels and were marked down by 0.11 and 0.03 cents per lb for both the ruling March and the forward May settlements at 48.91 and 49.28 cents per lb.
Mill ready off-take was relatively slow owing to the absence of leading mills and fell to 20,000 bales, as under:
SINDH TYPE: 3,000 bales, upper Sindh at Rs3,300, 200 and 400 bales, Shahdadpur and Mirpurkhas at Rs3,210, 400 bales, each Nawabshah and Moro at Rs3,200.PUNJAB VARIETY: 1,000 bales, Sadiqabad at Rs3,400, 4,000 bales, 1,000 bales, each Jahania, Jalalpur and Liquatpur at Rs3,250, 1,000 bales, Haroonabad, 600 bales each Bahawalpur and Burewala at Rs3,300 and 2,600 bales, Lodhran at Rs3,225 to Rs3,250.