KARACHI, July 11: Trading activity on the cotton market remained slow on Thursday as leading spinners were conspicuous by their absence because of higher asking prices by the ginners.
Stray lots of new crop from the lower Sindh ginners again changed hands at Rs1,700 per maund for delivery between Sept 15 to 20, while a lot of 100 bales was sold at Rs1,975.
Spinners purchase new crop lots for blending purposes with the current lots to produce higher counts of cotton yarn for export markets.
Floor brokers said both the rates at which new crop lots were sold had been much lower than a couple of sessions before and reflect that arrivals of phutti into the lower Sindh ginneries had increased during the last couple of sessions.
A few days back some lots of new crop were sold above the Rs2,000 per maund level on forward basis apparently in a bid not to hold long unsold positions until the current is fully exhausted, they added.
However, despite lower offering by the ginners, the future outlook appears to be a bit bullish in the backdrop of reports of global shortage of the commodity during the new season.
But cotton analysts said it was too early to say something about the direction of the market and the future price outlook as both would largely depend on the supply and demand factors.
“The months of October and November could be crucial for the market trend as by that time both the size of the crop and the damage to the standing crop, if any, will be available and they will greatly influence the underlying sentiment,” they added.
Last season prices have declined to a low of Rs1,225 at this time of the season followed by conflicting reports about the size of the new crop and speculative squeeze on the market until the TCP entered the market to ensure a fair return on the investment of growers.
Much has changed since then as unlike the previous season central Punjab did not buy phutti from the lower Sindh growers terming the early season operations un-economic, dealers said.
Official spot rates remained pegged at the last close since Monday, but New York cotton futures ran into speculative selling at the higher levels and fell modestly.
Ready business was light at about 2,000 bales, the following being some of the notable deals:
SINDH NEW CROP: 100 bales of Sultanabad at Rs1,700, delivery between Sept 15 and 20,100 bales, spot at Rs1,975.
CURRENT CROP: 400 bales, K-68 Sawgin, Mirpur Mathelo at Rs1,950 and 200 bales, Oboro also at Rs1,950.