KARACHI, Jan 22: Brisk activity was witnessed on the cotton market on Tuesday as spinners made an extensive covering purchases followed by reports that the Trading Corporation of Pakistan (TCP) will resume its operations to support the falling prices.
Spinners who have been sitting on the sidelines for the last couple of sessions being the sole buyers amid falling prices on the perception that the TCP will not intervene and let the counter market a free hand were surprised about reports of official intervention.
Ginners have been sending S.O.S to the government to save the cotton trade from an imminent collapse owing to falling prices of lint in the absence of strong mill demand.
“The TCP may not be bigger buyer as its official prices are much higher than the prevailing ones, its presence will certainly give a needed psychological boost to the shaky ginners”, says a floor broker.
The evidence of this perception is manifested in near-panic buying by the mills and spinners who lifted about 20,000 bales just in one go after the reports of TCP’s imminent entry into the market reached. Bulk of the buying was confined to fine lots from the Punjab ginneries.
As a result, some of the quality lots were sold at a premium of Rs25 per maund as compared to previous rates, while all other deals were done in line with the previous selling prices.
“Prices may not show a big rise despite heavy mill buying because of international parity levels, one thing appears certain that the presence of the TCP is expected to forestall further fall”, dealers said.
Some of the leading exporters are also following the market trend and are active buyers for any lot offered between Rs1,250 and Rs1,500. They purchased about 2,000 bales, including 1,500 from Chishtian at Rs1,500 per maund.
They said growers who are still holding unsold stocks of phutti may sell them after lint prices recovers from the current lower levels.
Ready business was fairly active as till late in the evening about 20,000 bales changed hands. The following being some of the notable deals:
SINDH TYPE: 2,000 bales, K-68, upper Sindh at Rs1.750, 500 bales, Shahdadpur at Rs1,550 and 500 bales, Sanghar at Rs1,600.
PUNJAB VARIETY: 2,000 bales, Rahimyar Khan at Rs1,725 to Rs1,750, 1,000 bales, at Rs1,775, 1,600 bales, Khanpur at Rs1,725, 1,000 bales at Rs1,750, 1,000 bales, D.G.Khan at Rs1,550, 300 bales, Burewala at Rs1,300, 400 bales, at Rs1,250, 1,000 bales, Chishtian at Rs1,500, 600 bales, Fakirwali at Rs1,650, 400 bales, at Rs1,550, 500 bales, Rasoolabad at Rs1,625, 4,000 bales, Bahawalpur at Rs1,725 to Rs1,750 and 1,000 bales, Yazman at Rs1,6.