KARACHI, Oct 27: After three days of persistent decline, cotton prices on Saturday resisted fresh fall thanks to revival of stray mill demand and weekend short-covering by leading spinners.
Fine lots from the Punjab ginneries were sold between Rs.1,625.00 and 1,725.00 per maund depending on quality, while Sindh variety was on average traded around Rs.1,600.00.
During the last couple of sessions, lint prices have fallen from the recent peak level of Rs.1,850.00 to Rs.1,575.00 and there were fears among the ginners that the falling mill demand may generate panic selling from the relatively weak ginners, who have no holding capacity, dealers said.
The underlying sentiment in part was also influenced favourably to a modest rebound staged by the New York cotton futures after having fallen to 30-year lows on Thursday.
“The ruling New York prices now have a relevance to the local market conditions”, they said, adding “spinners weigh options whether to go for the cheaper imported stuff or buy from the local market at a slightly higher rates”.
Spinners have already imported over 70,000 bales during the current season, starting from Sept 1, and the market sources claim leading among them have already booked another 0.250 million bales from various foreign supply lines after world prices fell below the 30-cent per lb level.
Floor brokers said the near-term price outlook for the local stuff appeared to be a bit bearish as spinners were not inclined to go in a big way to cover their forward positions against sales of cotton yarn.
“Spinners may not have many export orders because of war in Afghanistan and fears of disruption in shipments, those who are financially sound try to cover their annual consumption needs around this time of the season as fine lint is available in the beginning of the processing operations”, some ginners claim.
New York cotton futures were quoted higher by 0.34 and 0.33 cents at 28.86 and 30.55 cents per lb for both the ruling December and the distant March settlements but local official rates were held unchanged.
Ready offtake was active as spinners are back in the market after taking a breather. The following are some of the deals including those reported late on Friday evening by the Punjab ginners.
PUNJAB VARIETY: 1,000 bales, each from Nurpur and Madarsa at Rs.1,725.00, 200 bales, Bahawalpur at Rs.1,725.00, 300 and 200 bales, Lodhran and Rahimyar Khan at RS.1,725.00, 200 bales, each from Rajanpur and Multan at Rs.1,700.00, 200 bales, Chishtian at Rs.1,625.00, 400 bales, Mian Channu at Rs.1,625 to 1,650.00, 300 bales, Pir Mahal at Rs.1,625.00, 200 bales, Hasilpur at Rs.1,675.00, 200 bales, D.G. Khan at Rs.1,650.00 and 200 bales of Fort Abbas at Rs.1,690.00.