KARACHI, Sept 5: Cotton market on Thursday remained under pressure as ginners continued to indulge in near-panic selling amid fears of further decline in lint prices.
An idea of hasty selling may well be had from the fact that some of the deals in the lower Sindh lint were finalized as low as Rs1,850 per maund, the day’s average rate being Rs1,900 to Rs1,950.
Trading resumed around Rs1,950 and some big-deal business was reported at this level. But the mid-session witnessed hasty selling by some of the lower Sindh ginners and prices declined steadily to Rs1,850.
The interesting feature was that at each dip there was a deal as a section of spinners was out to cover forward positions at the falling prices.
“I don’t think ginners have the will to forestall fresh decline in prices after holding to their stocks for a couple of days”, says a broker “the larger arrivals of phutti have unnerved everyone at least for the near-term”.
As the arrivals of phutti are picking up each day and growers are virtually dumping the commodity in the ginneries like anything the set price structure is disrupted.
“Over the last couple of weeks, the new crop prices had declined by Rs350 per maund to Rs1,850 from Rs2,200 and if the current confusion continues there could more pruning”, market sources said.
However, they said the panic among growers is not backed by the objective conditions notably the supply and demand factors, the absence of spinners from the market may be one of the reasons behind hasty selling, they added.
According to local brokers leading spinners and textile mill owners have curtailed their daily intake followed by a considerable fall in world yarn demand and lower offered prices from the foreign end-product users. But no one among them is inclined to miss the falling market.
It was perhaps in this background that official spot rates were further lowered by Rs50 to Rs1,950 per maund, although some of the deals in the ready section were done below this level.
New York cotton futures also fell further by 0.30 and 47 cents per lb for both the ruling October and the forward December settlements at 43.50 and 45.27 cents per lb respectively.
Ready offtake was modestly higher at 5,000 bales as under: 1,400 bales, Tando Adam at Rs1,950, 1,000 bales, Shahdadpur at Rs1,950, 500 bales, Mirpukhas at Rs1,900, 100 bales, at Rs1,870, 300 bales, at Rs1,875 and 200 bales at Rs1,850, 200 bales, Sanghar at Rs1,925 and 400 bales, at Rs1,950.
PUNJAB VARIETY: 200 bales, Mian Channu at Rs2,000, 200 bales, Sahiwal at Rs1,950 and 100 bales at Rs1,925.