KARACHI, July 25: Cotton prices on Thursday showed a modest increase as ginners were reluctant sellers amid predictions of pressure on ready supplies in the coming months.
The successive tenders, both local and foreign, and higher bid seem to have altogether changed the cotton outlook at least for the near-term and ginners are not that fool to sell at the buyers’ option, dealers said.
“What seems to have added to the current bullish outlook is massive foreign bids against a modest-lot tender of the TCP,” they said, adding “the prices offered are in line with the ruling world prices.”
Just at the heels of local tenders, the TCP has invited bids from the foreign buyers for 21,000 bales on July 25, the third tender during the current month, against which it received bids for 90,000 bales.
“The overwhelming foreign buyers response against a modest offer reflects that the local lint is in strong demand and could fetch further higher prices if further sales delayed for some more weeks,” cotton specialists said.
The foreign buyers offered much improved prices, 37.05 cents for the lower grade and 38.07 cents per lb for the fine types. The TCP high-ups will decide whether to accept any of the bids on Friday or may ask the bidders to further raise their prices.
The current foreign bull-run on Pakistani lint indicates global shortage of the commodity in the major cotton producing countries, including the US and China, and world users move to build-up sustainable positions at the prevailing prices amid fears of speculative squeeze.
New York cotton futures on Thursday were quoted modestly lower at 45.90 and 47.54 cents per lb, and Pakistani lint is generally sold at discount of five to seven cents per lb as compared to longer staple length varieties.
Floor brokers said the TCP tenders had pulled the market out of the current impasse and ginners now are eyeing price level above Rs2,000 per maund for the new crop.
Official spot rates were revised upward by Rs25 after several days relative calm but in physical trading some deals were done well above them as ginners were not inclined to lower their asking prices.
As tussle between the ginners and the spinners over the prices continues to tilt the balance in their respective favour, ready business shrank further and till late in the evening about 500 bales of new crop changed hands, the following being some of the important deals: 200 bales of Pithoro at Rs1,900 and 100 bales of Burewala also at the same rate.