KARACHI, June 4: Cotton market on Tuesday maintained a firm outlook as spinners and mills extended active support at the prevailing prices, fearing a substantial decline in unsold stocks with the ginners.
“It is pre-final crop figure buying as spinners were inclined to cover positions as the Pakistan Cotton Ginners Association’s end-season tally could spring pleasant surprises for both the spinner and the exporter,” brokers said.
An idea of panic mill buying may well be had from the fact that a leading group of spinners has offered to buy a big lot of 4,000 bales from a Vehari ginner at Rs1,850 per maund, but the latter was claimed to be reluctant to finalize the deal eyeing apparently still higher rates.
After having imported over a million bales from various countries and about 9.7m bales from the local markets, spinners appear to be still short of their annual consumption targets, they added.
“The fresh spinner scramble for the leftover quality lots shows that spinners are out to establish a new consumption record during the current season around 10.5m bales,” predicts a leading broker.
He says spinners are building up long positions at the prevailing rates in anticipation of a substantial increase in textile exports to the European Union after the increase in quota and removal of some duties on products from here to cover the Afghan war export losses.
The PCGA final crop figures due to be released possibly on Wednesday are expected to set the future price trend, but indications are that lint may be more expansive in the remaining part of the season as compared to existing rates, market sources said.
The falling ready business also points to this factor as ginners prefer to hold on to their unsold positions rather than indulging in hasty selling.
As a result, there was no change in the local official sport rates, but New York cotton futures showed fractional either-way changes. While ruling July settlement managed to finish with a fractional rise of one cent per lb at 39.48 cents per lb, October contracts fell 0.4 cents at 41.56 cents per lb.
Ready offtake was light as till late in the evening following deals were confirmed by the brokerage houses: 100 bales of Mirpurkhas at Rs1,250, 1,000 bales, Mailsi at Rs1,750, and 400 bales of Alipur at Rs15,75.