KARACHI, Jan 6: Physical activity on the cotton market on Tuesday shrank to a modest proportion as spinners and mills curtailed their daily intake owing to delivery problems on account of two public holidays on Ashura.
As a result, prices eased further by Rs50 per maund but in the ready section some of the deals were finalised as low as Rs3,100 and brokers said the fall is technical ahead of holidays rather than any negative factor.
The weakness of the New York cotton futures, which reacted from the recent highs on speculative selling, was said to be another adverse factor, which caused price decline during the last two sessions, floor brokers said. They ruled out the possibility of fresh decline in prices as the crop is too short to meet the annual consumption needs of the textile sector, which is currently awaiting a big push on the export front.
The other positive development on the world cotton front would be revival of new year demand from the major importers, where the crop is said to be short, which in turn would push world textile prices further higher and so did the local ones, they said.
Fearing fresh increase in prices in the coming sessions spinners are building up long positions at the current rates ahead of any price flare-up in the coming weeks to secure their forward sales of cotton yarn and textiles to the world importers, they said.
Meanwhile, optimism prevailed in the textile sector on reports that the world demand for textiles is picking up with the New Year opening and could also be sustained in the months to come.
It was in this background that official spot rates were further lowered by Rs50 at Rs3,200 per maund.
New York cotton futures also reacted from the recent highs and were marked down by 0.60 and 0.56 cents per lb at 48.31 and 48.72 for both the ruling March and the distant May settlements, respectively.
The following are some of the notable deals, which gone through late on Tuesday evening:
SINDH TYPE: 1,000 bales, Sanghar at Rs3,150 to 3,175, 400 bales, Khipro at Rs3,100.
PUNJAB VARIETY: 1,000 bales, Mianwali at Rs3,300, 1,000 bales, Rajanpur at Rs3,200 to 3,300, 400 bales, each Alipur, Haroonabad and Uch Sharif at 3,200, 400 bales, Bahawalnagar at Rs3,100,1,000 bales, Pir Mahal at Rs3,175,1,000 bales, Rahimyar Khan and 600 bales, Lodhran at Rs3,250.