KARACHI, Aug 20: Cotton market on Tuesday showed steady trend as arrivals of phutti into the ginneries showed a considerable fall after the resumption of processing operations by a couple of others in the Sindh cotton belt.
The other aiding factor was that some of the progressive growers are holding back their stocks of phutti to push prices higher from the last week’s lower levels. Phutti prices have fallen to Rs900 per 40 kg from the last week’s peak level of Rs1,025.
With the upper Sindh fine type cotton is still in the flowering stage, most of the ginneries in the central and lower Sindh cotton belt are fed by the local crop and when more join the line up the arrival of phutti are distributed among them. That could well mean pressure on supplies and the consequent increase in lint prices.
“After having fallen to Rs2,000 per maund, lint prices have risen by Rs75 during the last two sessions and it could well mean the resumption of journey to the pre-reaction level of Rs2,350”, predicts a leading cotton broker.
A deal of 200 bales from a Sultanabad ginnery was finalized at Rs2,100 reflecting that market is firm thanks to the presence of mill demand.
Mills and spinners generally re-enter the market after prices fall to Rs2,000 as this rate conforms to their export parity level”, he adds.
Trading on Tuesday resumed around Rs2,000 per maund but as the mill demand picked up prices rose accordingly, the day’s highest rate being Rs2,075 per maund.
Reports from the central Punjab cotton belt where a couple of ginneries have also resumed operations including those being fed by the phutti from the Sindh are not that encouraging as new crop lint is being sold at a modest premium as compared to its Sindh counterpart.
The official rate committee further lowered lint prices by another Rs25 per maund in line with Monday’s fall in physical trading but is expected to revise them upward on Wednesday because of current rebound.
New York cotton futures showed a fresh increase of 0.87 and 1.04 cents per lb for both the ruling October and the distant December contracts at 45.13 and 46.38 cents per lb respectively.
Ready offtake showed a modest improvement thanks to revival of mill demand ahead of the TCP tender and purchased about 2,000 bales from the Sindh ginners, the following being some of the notable deals: 200 bales Tando Adam at Rs2,050, 200 bales at Rs2,070, 100 bales, Sanghar at Rs2,050, 100 bales at Rs2,060, 200 bales at Rs2,075, 200 bales, Sinjoro at Rs2,075 and 200 bales, Sultanabad at Rs2,100.